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File pursuant to Rule 424(b)(3)
Registration Statement No. 333-242135

PROXY STATEMENT FOR

EXTRAORDINARY GENERAL MEETING OF ARYA SCIENCES ACQUISITION CORP II

PROSPECTUS FOR

102,336,166 SHARES OF COMMON STOCK AND 5,149,666 WARRANTS OF ARYA SCIENCES ACQUISITION CORP II

(AFTER ITS DOMESTICATION AS A CORPORATION INCORPORATED IN THE STATE OF DELAWARE,

WHICH WILL BE RENAMED CEREVEL THERAPEUTICS HOLDINGS, INC. IN CONNECTION WITH THE

DOMESTICATION DESCRIBED HEREIN)

 

 

The board of directors of ARYA Sciences Acquisition Corp II, a Cayman Islands exempted company (“ARYA”), has unanimously approved the transactions (collectively, the “Business Combination”) contemplated by that certain Business Combination Agreement, dated July 29, 2020 (as amended on October 2, 2020 by Amendment No. 1 to Business Combination Agreement, and as may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among ARYA, Cassidy Merger Sub 1, Inc., a Delaware corporation (“Cassidy Merger Sub”), and Cerevel Therapeutics, Inc., a Delaware corporation (“Cerevel”), a copy of which is attached to this proxy statement/prospectus as Annexes A-1 and A-2, including the domestication of ARYA as a Delaware corporation (the “Domestication”). As described in this proxy statement/prospectus, ARYA’s shareholders are being asked to consider a vote upon each of the Domestication and the Business Combination, among other items. As used in this proxy statement/prospectus, “New Cerevel” refers to ARYA after giving effect to the consummation of the Domestication and the Business Combination.

In connection with the Domestication, on the Closing Date prior to the Effective Time (as defined below): (i) each issued and outstanding Class A ordinary share, par value $0.0001 per share (the “Class A ordinary shares”), and each issued and outstanding Class B ordinary share, par value $0.0001 per share (the “Class B ordinary shares”), of ARYA will be converted into one share of common stock, par value $0.0001 per share, of New Cerevel (the “New Cerevel Common Stock”); (ii) each issued and outstanding whole warrant to purchase Class A ordinary shares of ARYA will automatically represent the right to purchase one share of New Cerevel Common Stock at an exercise price of $11.50 per share on the terms and conditions set forth in the ARYA warrant agreement; (iii) the governing documents of ARYA will be amended and restated and become the certificate of incorporation and the bylaws of New Cerevel as described in this proxy statement/prospectus; and (iv) ARYA’s name will change to “Cerevel Therapeutics Holdings, Inc.” In connection with clauses (i) and (ii) of this paragraph, each issued and outstanding unit of ARYA that has not been previously separated into the underlying Class A ordinary shares of ARYA and the underlying warrants of ARYA prior to the Domestication will, be cancelled and will entitle the holder thereof to one share of New Cerevel Common Stock and one-third of one warrant representing the right to purchase one share of New Cerevel Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions set forth in the ARYA warrant agreement.

On the date of Closing, promptly following the consummation of the Domestication, Cassidy Merger Sub will merge with and into Cerevel (the “Merger”), with Cerevel as the surviving company in the Merger and, after giving effect to the Merger, Cerevel will be a wholly-owned subsidiary of ARYA (the time that the Merger becomes effective being referred to as the “Effective Time”).

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same exchange ratio at which the vested equity awards are exchanged for shares of New Cerevel Common Stock or comparable equity awards, as applicable. The numbers of shares of New Cerevel Common Stock subject to the comparable unvested equity awards into which unvested Cerevel equity awards are exchanged will be deemed to be granted under the proposed Cerevel Therapeutics Holdings, Inc. 2020 Equity Incentive Plan, reducing the number of shares otherwise available for issuance thereunder, and may not exceed a cap set forth in the Business Combination Agreement that would, if the transaction closed on September 30, 2020, equate to 7,628,895 shares of New Cerevel Common Stock. The market value of the shares to be issued could vary significantly from the market value as of the date of this proxy statement/prospectus.

It is anticipated that, upon completion of the Business Combination, (i) the Cerevel Shareholders, including Bain Investor and Pfizer, will own, collectively, approximately 68.63% of the outstanding New Cerevel Common Stock, and (ii) ARYA’s initial shareholders will own approximately 3.32% of the outstanding New Cerevel Common Stock, in each case, assuming that none of ARYA’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 77.75% and 3.77%, respectively, assuming that, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, all of ARYA’s outstanding public shares are redeemed in connection with the Business Combination. These percentages (i) assume that 76,263,673 shares of New Cerevel Common Stock are issued to the holders of shares of common stock (including the holders of vested restricted stock units that will settle prior to completion of the Business Combination) and preferred stock of Cerevel at Closing, which would be the number of shares of New Cerevel Common Stock issued to these holders if Closing were to occur on September 30, 2020; (ii) are based on 32,000,000 shares of New Cerevel Common Stock to be issued in the PIPE Financing or deemed issued in connection with any pre-funding by Bain Investor pursuant to its Subscription Agreement; (iii) do not take into account any exercise of public warrants or private placement warrants to purchase New Cerevel Common Stock that will be outstanding immediately following Closing; (iv) do not take into account any shares of New Cerevel Common Stock underlying vested and unvested options that will be held by equityholders of Cerevel immediately following Closing; and (v) do not take into account any shares of New Cerevel Common Stock underlying unvested restricted stock units held by equityholders of Cerevel immediately following Closing. If the actual facts are different than these assumptions, the ownership percentages in New Cerevel will be different.

This prospectus covers 102,336,166 shares of New Cerevel Common Stock (including shares issuable upon exercise of the vested equity awards (excluding vested options) and warrants described above) and 5,149,666 warrants to acquire shares of New Cerevel Common Stock to be issued in connection with the Domestication. The number of shares of New Cerevel Common Stock that this prospectus covers represents the maximum number of shares that may be issued to holders of shares and vested equity awards of Cerevel in connection with the Business Combination (as more fully described in this proxy statement/prospectus), together with the shares issued or issuable to the existing shareholders and warrant holders of ARYA in connection with the Business Combination.

ARYA’s units, public shares and public warrants are currently listed on Nasdaq under the symbols “ARYBU,” “ARYB” and “ARYBW,” respectively. ARYA will apply for listing, to be effective at the time of the Business Combination, of New Cerevel Common Stock and warrants on Nasdaq under the proposed symbols “CERE” and “CEREW,” respectively. It is a condition of the consummation of the Business Combination that ARYA receive confirmation from Nasdaq that New Cerevel has been conditionally approved for listing on Nasdaq, but there can be no assurance such listing condition will be met or that ARYA will obtain such confirmation from Nasdaq. If such listing condition is not met or if such confirmation is not obtained, the Business Combination will not be consummated unless the Nasdaq condition set forth in the Business Combination Agreement is waived by the applicable parties.

 

 

The accompanying proxy statement/prospectus provides shareholders of ARYA with detailed information about the Business Combination and other matters to be considered at the extraordinary general meeting of ARYA. We encourage you to read the entire accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors ” beginning on page 33 of the accompanying proxy statement/prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated October 7, 2020, and

is first being mailed to ARYA’s shareholders on or about October 9, 2020.


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ARYA SCIENCES ACQUISITION CORP II

51 Astor Place, 10th Floor

New York, New York 10003

Dear ARYA Sciences Acquisition Corp II Shareholders:

You are cordially invited to attend the extraordinary general meeting (the “extraordinary general meeting”) of ARYA Sciences Acquisitions Corp II, a Cayman Islands exempted company (“ARYA”), at 10:30 a.m., Eastern Time, on October 26, 2020, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

As further described in the accompanying proxy statement/prospectus, in connection with the Domestication, on the Closing Date prior to the Effective Time (as described below), among other things, (i) ARYA will change its name to “Cerevel Therapeutics Holdings, Inc.,” (ii) all of the outstanding shares of ARYA will be converted into common stock of a new Delaware corporation and all of the outstanding ARYA warrants will be converted into warrants to purchase common stock of a new Delaware corporation, and (iii) the governing documents of ARYA will be amended and restated. As used in the accompanying proxy statement/prospectus, “New Cerevel” refers to ARYA after giving effect to the Domestication and the Business Combination.

At the extraordinary general meeting, ARYA shareholders will be asked to consider and vote upon a proposal, which is referred to herein as the “Business Combination Proposal” to approve and adopt the Business Combination Agreement, (and the transactions contemplated thereby) dated as of July 29, 2020 (as amended on October 2, 2020 by Amendment No. 1 to Business Combination Agreement, and as may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among ARYA, Cassidy Merger Sub 1, Inc., a Delaware corporation (“Cassidy Merger Sub”) and Cerevel Therapeutics, Inc., a Delaware corporation (“Cerevel”), a copy of which is attached to the accompanying proxy statement/prospectus as Annexes A-1 and A-2, including the transactions contemplated thereby.

As further described in the accompanying proxy statement/prospectus, subject to the terms and conditions of the Business Combination Agreement, the following transactions will occur:

 

  (a)

On the Closing Date, prior to the time at which the Effective Time occurs, ARYA will change its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which ARYA will change its name to “Cerevel Therapeutics Holdings, Inc.” (“New Cerevel”) (for further details, see “Proposal No. 2—The Domestication Proposal”).

 

  (b)

Cassidy Merger Sub will merge with and into Cerevel (the “Merger”), with Cerevel as the surviving company in the Merger and, after giving effect to such Merger, Cerevel shall be a wholly-owned subsidiary of ARYA. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (i).

In connection with the foregoing and concurrently with the execution of the Business Combination Agreement, ARYA entered into Subscription Agreements (the “Subscription Agreements”) with BC Perception Holdings, LP, a Delaware limited partnership (the “Bain Investor”), as well as Perceptive Life Sciences Master Fund Ltd, a Cayman Islands exempted company (the “Perceptive PIPE Investor”), Pfizer Inc., a Delaware corporation (“Pfizer”) and certain other investors (such other investors, together with the Perceptive PIPE Investor and Pfizer, the “Other PIPE Investors,” and the Other PIPE Investors, together with the Bain Investor,


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the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to subscribe for and purchase, and ARYA has agreed to issue and sell to the PIPE Investors, an aggregate of 32,000,000 shares of New Cerevel Common Stock at a price of $10.00 per share, for aggregate gross proceeds of $320,000,000 (the “PIPE Financing”). The Perceptive PIPE Investor will fund $30,000,000 in the PIPE Financing, Pfizer will fund $12,000,000 in the PIPE Financing, and the Bain Investor will fund $100,000,000 in the PIPE Financing. Pursuant to the Subscription Agreement entered into with the Bain Investor, the Bain Investor has pre-funded $25,000,000 of its commitment, and may further pre-fund a portion of its remaining PIPE Financing commitment, on the terms and subject to the conditions set forth in such Subscription Agreement and the Business Combination Agreement, which pre-funding will reduce the Bain Investor’s commitment required to be funded under the Subscription Agreement on a dollar-for-dollar basis. The shares of New Cerevel Common Stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. ARYA will grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the substantially concurrent closing of the Business Combination.

You will also be asked to consider and vote upon (a) five (5) separate proposals to approve material differences between ARYA’s existing amended and restated memorandum and articles of association (the “Existing Governing Documents”) and the proposed new certificate of incorporation of New Cerevel and the proposed new bylaws of New Cerevel upon the Domestication, copies of which are attached to the accompanying proxy statement/prospectus as Annexes C and D, respectively, which are referred to herein collectively as the “Governing Documents Proposals,” (b) a proposal to approve, for purpose of complying with Nasdaq Listing Rule 5635, the issuance of New Cerevel Common Stock in connection with the Business Combination and the PIPE Financing, which is referred to herein as the “Nasdaq Proposal,” (c) a proposal to approve and adopt the Cerevel Therapeutics Holdings, Inc. 2020 Equity Incentive Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex J, which is referred to herein as the “Incentive Award Plan Proposal,” (d) a proposal to approve and adopt the Cerevel Therapeutics Holdings, Inc. 2020 Employee Stock Purchase Plan, a copy of which is attached to the accompanying proxy statement/prospectus as Annex K, which is referred to herein as the “Employee Stock Purchase Plan Proposal,” and (e) a proposal to adjourn the extraordinary general meeting to a later date or dates to the extent necessary, which is referred to herein as the “Adjournment Proposal.”

The Business Combination will be consummated only if the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals, the Incentive Award Plan Proposal and the Nasdaq Proposal (collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. The Governing Documents Proposals that are not Required Governing Documents Proposals and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.

The Adjournment Proposal provides for a vote to adjourn the extraordinary general meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to ARYA shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient ARYA ordinary shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting, (B) in order to solicit additional proxies from ARYA shareholders in favor of one or more of the proposals at the extraordinary general meeting or (C) if ARYA shareholders redeem an amount of the public shares such that the condition to consummation of the Business Combination that the aggregate cash proceeds to be received by ARYA from the trust account in connection with the Business Combination, together with the aggregate gross proceeds from the PIPE Financing (including for the avoidance of doubt, any amounts pre-funded by the Bain Investor), equal no less than $250,000,000 after deducting ARYA’s unpaid expenses, liabilities, and any amounts paid to ARYA shareholders that exercise their redemption rights in connection with the Business Combination would not be


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satisfied (such aggregate proceeds, the “Aggregate Transaction Proceeds”, and such condition to the consummation of the Business Combination, the “Aggregate Transaction Proceeds Condition”).

In connection with the Business Combination, certain related agreements have been, or will be entered into on or prior to the closing of the Business Combination, including the Subscription Agreements, Cerevel Shareholder Transaction Support Agreements, the ARYA Shareholder Transaction Support Agreements, the Sponsor Letter Agreement and the Amended and Restated Registration and Shareholder Rights Agreement (each as defined in the accompanying proxy statement/prospectus). See “Business Combination Proposal—Related Agreements” in the accompanying proxy statement/prospectus for more information.

Pursuant to the Existing Governing Documents, a holder of ARYA’s public shares (a “public shareholder”) may request that ARYA redeem all or a portion of such public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company (“Continental”), ARYA’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders (other than those who have agreed not to do so by executing an ARYA Shareholder Transaction Support Agreement) may elect to redeem their public shares even if they vote for the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, New Cerevel will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of ARYA’s initial public offering, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of September 30, 2020, this would have amounted to approximately $10.005 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares of New Cerevel Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of ARYA— Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

Sponsor and each of Messrs. Bauer, Robins and Wider (collectively, the “initial shareholders”) have, pursuant to the Sponsor Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive their anti-dilution rights with respect to their Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement/prospectus, the initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Letter Agreement.

The Business Combination Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the


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parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement. In addition, in no event will ARYA redeem public shares in an amount that would cause New Cerevel’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing.

ARYA is providing the accompanying proxy statement/prospectus and accompanying proxy card to ARYA’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general meeting, the Business Combination and other related business to be considered by ARYA’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting, all of ARYA’s shareholders are urged to read the accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described inRisk Factorsbeginning on page 33 of the accompanying proxy statement/prospectus.

After careful consideration, the board of directors of ARYA has unanimously approved the Business Combination Agreement and the transactions contemplated thereby, including the Merger, and unanimously recommends that shareholders vote “FOR” the adoption of the Business Combination Agreement and approval of the transactions contemplated thereby, including the Merger, and “FOR” all other proposals presented to ARYA’s shareholders in the accompanying proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of ARYA, you should keep in mind that ARYA’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of ARYA’s Directors and Executive Officers in the Business Combination” in the accompanying proxy statement/prospectus for a further discussion of these considerations.

The approval of each of the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D and the Governing Documents Proposal E requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. The approval of each of the Business Combination Proposal, the Governing Documents Proposal A, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Governing Documents Proposals that are not Required Governing Documents Proposals and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary


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general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO ARYA’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of ARYA’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

Sincerely,

 

LOGO

Joseph Edelman

Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated October 7, 2020 and is first being mailed to shareholders on or about October 9, 2020.


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ARYA SCIENCES ACQUISITION CORP II

51 Astor Place, 10th Floor

New York, New York 10003

NOTICE OF EXTRAORDINARY GENERAL MEETING

TO BE HELD ON OCTOBER 26, 2020

TO THE SHAREHOLDERS OF ARYA SCIENCES ACQUISITION CORP II:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders (the “extraordinary general meeting”) of ARYA Sciences Acquisition Corp II, a Cayman Islands exempted company (“ARYA”), will be held at 10:30 a.m., Eastern Time, on October 26, 2020, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

 

   

Proposal No. 1—The Business Combination ProposalRESOLVED, as an ordinary resolution, that ARYA’s entry into the Business Combination Agreement, dated as of July 29, 2020 (as amended on October 2, 2020 by Amendment No. 1 to Business Combination Agreement, and as may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among ARYA, Cassidy Merger Sub 1, Inc., a Delaware corporation (“Cassidy Merger Sub”), and Cerevel Therapeutics, Inc., a Delaware corporation (“Cerevel”), a copy of which is attached to the proxy statement/prospectus as Annexes A-1 and A-2, pursuant to which, among other things, following the de-registration of ARYA as an exempted company in the Cayman Islands and the continuation and domestication of ARYA as a corporation in the State of Delaware with the name “Cerevel Therapeutics Holdings, Inc.,” (a) Cassidy Merger Sub will merge with and into Cerevel (the “Merger”), with Cerevel as the surviving company in the Merger and, after giving effect to such Merger, Cerevel shall be a wholly-owned subsidiary of ARYA and (b) at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (a), on the terms and subject to the conditions set forth in the Business Combination Agreement, certain related agreements (including the Subscription Agreements, the Cerevel Shareholder Transaction Support Agreements, the ARYA Shareholder Transaction Support Agreements, the Sponsor Letter Agreement and the Amended and Restated Registration and Shareholder Rights Agreement, each in the form attached to the proxy statement/prospectus as Annex F, Annex H, Annex I, Annex E and Annex G, respectively), and the transactions contemplated thereby, be approved, ratified and confirmed in all respects.

 

   

Proposal No. 2—The Domestication ProposalRESOLVED, as a special resolution, that ARYA be transferred by way of continuation to Delaware pursuant to Part XII of the Companies Law (Revised) of the Cayman Islands and Section 388 of the General Corporation Law of the State of Delaware and, immediately upon being de-registered in the Cayman Islands, ARYA be continued and domesticated as a corporation under the laws of the state of Delaware and, conditional upon, and with effect from, the registration of ARYA as a corporation in the State of Delaware, the name of ARYA be changed from “ARYA Sciences Acquisition Corp II” to “Cerevel Therapeutics Holdings, Inc.”

 

   

Governing Documents Proposals—to consider and vote upon the following five (5) separate resolutions to approve that, upon the Domestication, the amended and restated memorandum and articles of association of ARYA (“Existing Governing Documents”) be amended and restated by the deletion in their entirety and the substitution in their place of the proposed new certificate of incorporation, a copy of which is attached to the proxy statement/prospectus as Annex C (the “Proposed Certificate of Incorporation”) and the proposed new bylaws, a copy of which is attached to the proxy statement/prospectus as Annex D (the “Proposed Bylaws”) of “Cerevel Therapeutics


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Holdings, Inc.” upon the Domestication (such proposals, collectively, the “Governing Documents Proposals”):

 

   

Proposal No. 3—Governing Documents Proposal A—RESOLVED, as an ordinary resolution, that the change in the authorized share capital of ARYA from US$50,000 divided into (i) 479,000,000 Class A ordinary shares, par value $0.0001 per share, (ii) 20,000,000 Class B ordinary shares, par value $0.0001 per share and (iii) 1,000,000 preference shares, par value $0.0001 per share, to (a) 500,000,000 shares of common stock, par value $0.0001 per share, of New Cerevel and (b) 10,000,000 shares of preferred stock, par value $0.0001 per share, of New Cerevel be approved.

 

   

Proposal No. 4—Governing Documents Proposal B—RESOLVED, as a special resolution, that the authorization to the New Cerevel Board to issue any or all shares of New Cerevel Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New Cerevel Board and as may be permitted by the Delaware General Corporation Law be approved.

 

   

Proposal No. 5—Governing Documents Proposal C—RESOLVED, as a special resolution, that the provision that certain provisions of the certificate of incorporation of New Cerevel are subject to the Amended and Restated Registration and Shareholder Rights Agreement be approved.

 

   

Proposal No. 6—Governing Documents Proposal D—RESOLVED, as a special resolution, that the removal of the ability of New Cerevel stockholders to take action by written consent in lieu of a meeting be approved.

 

   

Proposal No. 7—Governing Documents Proposal E—RESOLVED, as a special resolution, that the amendment and restatement of the Existing Governing Documents be approved and that all other changes necessary or, as mutually agreed in good faith by ARYA and Cerevel, desirable in connection with the replacement of Existing Governing Documents with the Proposed Certificate of Incorporation and Proposed Bylaws as part of the Domestication (copies of which are attached to the proxy statement/prospectus as Annex C and Annex D, respectively), including (i) changing the post-Business Combination corporate name from “ARYA Sciences Acquisition Corp II” to “Cerevel Therapeutics Holdings, Inc.” (which is expected to occur upon the consummation of the Domestication), (ii) making New Cerevel’s corporate existence perpetual, (iii) adopting Delaware as the exclusive forum for certain stockholder litigation and the United States District Court for the District of Massachusetts as the exclusive forum for litigation arising out of the Securities Act of 1933, as amended, (iv) electing to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested stockholders and (v) removing certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination be approved.

 

   

Proposal No. 8—The Nasdaq ProposalRESOLVED, as an ordinary resolution, that for the purposes of complying with the applicable provisions of Nasdaq Stock Exchange Listing Rule 5635, the issuance of shares of New Cerevel Common Stock be approved.

 

   

Proposal No. 9—The Incentive Award Plan ProposalRESOLVED, as an ordinary resolution, that the Cerevel Therapeutics Holdings, Inc. 2020 Equity Incentive Plan, a copy of which is attached to the proxy statement/prospectus as Annex J, be adopted and approved.

 

   

Proposal No. 10—The Employee Stock Purchase Plan ProposalRESOLVED, as an ordinary resolution, that the Cerevel Therapeutics Holdings, Inc. 2020 Employee Stock Purchase Plan, a copy of which is attached to the proxy statement/prospectus as Annex K, be adopted and approved.

 

   

Proposal No. 11—The Adjournment ProposalRESOLVED, as an ordinary resolution, that the adjournment of the extraordinary general meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the proxy statement/prospectus is provided to ARYA shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient ARYA ordinary shares represented (either in person or by proxy) to constitute a


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quorum necessary to conduct business at the extraordinary general meeting, (B) in order to solicit additional proxies from ARYA shareholders in favor of one or more of the proposals at the extraordinary general meeting or (C) if ARYA shareholders redeem an amount of the public shares such that the condition to consummation of the Business Combination that the aggregate cash proceeds to be received by ARYA from the trust account in connection with the Business Combination, together with aggregate gross proceeds from the PIPE Financing (including for the avoidance of doubt, any amounts pre-funded by the Bain Investor), equal no less than $250,000,000 after deducting ARYA’s unpaid expenses, liabilities, and any amounts paid to ARYA shareholders that exercise their redemption rights in connection with the Business Combination would not be satisfied, at the extraordinary general meeting be approved.

Each of the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals, the Nasdaq Proposal and the Incentive Award Plan Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Governing Documents Proposals that are not Required Governing Documents Proposals and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on any other proposal.

These items of business are described in this proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting.

Only holders of record of ordinary shares at the close of business on September 4, 2020 are entitled to notice of and to vote and have their votes counted at the extraordinary general meeting and any adjournment of the extraordinary general meeting.

This proxy statement/prospectus and accompanying proxy card is being provided to ARYA’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to attend the extraordinary general meeting, all of ARYA’s shareholders are urged to read this proxy statement/prospectus, including the Annexes and the documents referred to herein carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factorsbeginning on page 33 of this proxy statement/prospectus.

After careful consideration, the board of directors of ARYA has unanimously approved the Business Combination Agreement and the transactions contemplated thereby, including the Merger, and unanimously recommends that shareholders vote “FOR” the adoption of the Business Combination Agreement and approval of the transactions contemplated thereby, including the Merger, and “FOR” all other proposals presented to ARYA’s shareholders in this proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of ARYA, you should keep in mind that ARYA’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of ARYA’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.

Pursuant to the Existing Governing Documents, a public shareholder may request of ARYA that New Cerevel redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental, ARYA’s transfer agent, in which you (i) request that New Cerevel redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

 

  (iii)

deliver your public shares to Continental, ARYA’s transfer agent, physically or electronically through The Depository Trust Company.


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Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on October 22, 2020 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental, ARYA’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders (other than those who have agreed not to do so by executing an ARYA Shareholder Transaction Support Agreement) may elect to redeem public shares regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, ARYA’s transfer agent, New Cerevel will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of ARYA’s initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of September 30, 2020, this would have amounted to approximately $10.005 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place following the Domestication and, accordingly, it is shares of New Cerevel Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of ARYA—Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The initial shareholders have, pursuant to the Sponsor Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive their anti-dilution rights with respect to their Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Letter Agreement.

The Business Combination Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement. In addition, in no event will ARYA redeem public shares in an amount that would cause New Cerevel’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing.

The approval of each of the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D and the Governing Documents Proposal E requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy


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at the extraordinary general meeting and entitled to vote on such matter. The approval of each of the Business Combination Proposal, the Governing Documents Proposal A, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Governing Documents Proposals that are not Required Governing Documents Proposals and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Your attention is directed to the remainder of the proxy statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your ordinary shares, please contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing ARYB.info@investor.morrowsodali.com.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of ARYA Sciences Acquisition Corp II,

 

LOGO

Joseph Edelman

Chairman of the Board of Directors

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO ARYA’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.


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TABLE OF CONTENTS

 

     Page  

ADDITIONAL INFORMATION

     i  

TRADEMARKS

     i  

SELECTED DEFINITIONS

     ii  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     vi  

QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF ARYA

     ix  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     1  

RISK FACTORS

     33  

EXTRAORDINARY GENERAL MEETING OF ARYA

     80  

BUSINESS COMBINATION PROPOSAL

     87  

DOMESTICATION PROPOSAL

     123  

GOVERNING DOCUMENTS PROPOSALS

     126  

GOVERNING DOCUMENTS PROPOSAL A—APPROVAL OF AUTHORIZATION OF CHANGE TO AUTHORIZED SHARE CAPITAL, AS SET FORTH IN THE PROPOSED GOVERNING DOCUMENTS

     129  

GOVERNING DOCUMENTS PROPOSAL B—APPROVAL OF PROPOSAL REGARDING ISSUANCE OF PREFERRED STOCK OF NEW CEREVEL AT THE BOARD OF DIRECTORS’ SOLE DISCRETION, AS SET FORTH IN THE PROPOSED GOVERNING DOCUMENTS

     131  

GOVERNING DOCUMENTS PROPOSAL C—APPROVAL OF PROPOSAL REGARDING CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION BEING SUBJECT TO THE AMENDED AND RESTATED REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT

     133  

GOVERNING DOCUMENTS PROPOSAL D—APPROVAL OF PROPOSAL REGARDING THE ABILITY OF STOCKHOLDERS TO ACT BY WRITTEN CONSENT, AS SET FORTH IN THE PROPOSED GOVERNING DOCUMENTS

     135  

GOVERNING DOCUMENTS PROPOSAL E—APPROVAL OF OTHER CHANGES IN CONNECTION WITH ADOPTION OF THE PROPOSED GOVERNING DOCUMENTS

     137  

NASDAQ PROPOSAL

     141  

INCENTIVE AWARD PLAN PROPOSAL

     143  

EMPLOYEE STOCK PURCHASE PLAN PROPOSAL

     148  

ADJOURNMENT PROPOSAL

     152  

U.S. FEDERAL INCOME TAX CONSIDERATIONS

     154  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     169  

INFORMATION ABOUT ARYA

     180  

ARYA’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     195  

INFORMATION ABOUT CEREVEL

     200  

CEREVEL’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     280  

EXECUTIVE COMPENSATION

     306  

DIRECTOR COMPENSATION

     315  

MANAGEMENT OF NEW CEREVEL FOLLOWING THE BUSINESS COMBINATION

     317  

BENEFICIAL OWNERSHIP OF SECURITIES

     324  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     327  

COMPARISON OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS

     334  

DESCRIPTION OF NEW CEREVEL SECURITIES

     336  

SECURITIES ACT RESTRICTIONS ON RESALE OF NEW CEREVEL COMMON STOCK

     349  

STOCKHOLDER PROPOSALS AND NOMINATIONS

     350  

SHAREHOLDER COMMUNICATIONS

     350  

LEGAL MATTERS

     351  

EXPERTS

     351  

DELIVERY OF DOCUMENTS TO SHAREHOLDERS

     351  

ENFORCEABILITY OF CIVIL LIABILITY

     351  

TRANSFER AGENT AND REGISTRAR

     351  

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

     352  

INDEX TO FINANCIAL STATEMENTS

     F-1  


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ADDITIONAL INFORMATION

You may request copies of this proxy statement/prospectus and any other publicly available information concerning ARYA, without charge, by written request to ARYA Sciences Acquisition Corp II, 51 Astor Place, 10th Floor, New York, New York 10003, or by telephone request at (212) 284-2300; or Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing ARYB.info@investor.morrowsodali.com or from the SEC through the SEC website at http://www.sec.gov.

In order for ARYA’s shareholders to receive timely delivery of the documents in advance of the extraordinary general meeting of ARYA to be held on October 26, 2020, you must request the information no later than five business days prior to the date of the extraordinary general meeting, by October 19, 2020.

TRADEMARKS

This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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SELECTED DEFINITIONS

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:

 

   

“Articles of Association” are to the amended and restated articles of association of ARYA;

 

   

“ARYA,” “we,” “us” or “our” are to ARYA Sciences Acquisition Corp II, a Cayman Islands exempted company, prior to the consummation of the Business Combination;

 

   

“ARYA Acquisition Proposal” means (a) any transaction or series of related transactions under which ARYA or any of its controlled affiliates, directly or indirectly, (i) acquires or otherwise purchases any other person(s), (ii) engages in a business combination with any other person(s) or (iii) acquires or otherwise purchases all or a material portion of the assets or businesses of any other Persons(s) (in the case of each of clause (i), (ii) and (iii), whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, tender offer or otherwise) or (b) any equity, debt or similar investment in ARYA or any of its controlled affiliates;

 

   

“ARYA Board” are to ARYA’s board of directors;

 

   

“Bain Investor” are to BC Perception Holdings, LP, a Delaware limited partnership;

 

   

“Business Combination” are to the Domestication, the Merger and other transactions contemplated by the Business Combination Agreement, collectively, including the PIPE Financing;

 

   

“Business Combination Agreement” are to that certain Business Combination Agreement, dated July 29, 2020 (as amended on October 2, 2020 by Amendment No. 1 to Business Combination Agreement, and as may be further amended, supplemented or otherwise modified from time to time), by and among ARYA, Cassidy Merger Sub and Cerevel;

 

   

“Cassidy Merger Sub” are to Cassidy Merger Sub 1, Inc., a Delaware corporation and wholly-owned subsidiary of ARYA prior to the consummation of the Business Combination;

 

   

“Cayman Islands Companies Law” are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time;

 

   

“Cerevel” are to Cerevel Therapeutics, Inc., a Delaware corporation, prior to the consummation of the Business Combination;

 

   

“Cerevel Acquisition Proposal” means (a) any transaction or series of related transactions under which any person(s), directly or indirectly, (i) acquires or otherwise purchases Cerevel or any of its controlled affiliates or (ii) all or a material portion of assets or businesses of Cerevel or any of its controlled affiliates (in the case of each of clause (i) and (ii), whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, tender offer or otherwise), or (b) any equity or similar investment in Cerevel or any of its controlled affiliates (subject to exceptions to the PIPE Financing or the issuance of the applicable class of shares of capital stock of Cerevel upon the exercise or conversion of any outstanding Cerevel equity awards);

 

   

“Cerevel Shareholders” are to the Bain Investor, Pfizer and management of Cerevel holding shares of Cerevel;

 

   

“Class A ordinary shares” are to the Class A ordinary shares, par value $0.0001 per share, of ARYA, which will automatically convert, on a one-for-one basis, into shares of New Cerevel Common Stock in connection with the Domestication;

 

   

“Class B ordinary shares” or “founder shares” are to the 3,737,500 Class B ordinary shares, par value $0.0001 per share, of ARYA outstanding as of the date of this proxy statement/prospectus that were initially issued to our Sponsor in a private placement prior to our initial public offering and of which 90,000 were transferred to Messrs. Bauer, Robins and Wider (30,000 shares each) in May 2020, and, in connection with the Domestication, will automatically convert, on a one-for-one basis, into shares of New Cerevel Common Stock;

 

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“Closing” are to the closing of the Business Combination;

 

   

“Closing Date” means that date that is in no event later than the third (3rd) business day, following the satisfaction (or, to the extent permitted by applicable law, waiver) of the conditions described under the section entitled Business Combination Proposal—The Business Combination Agreement—Conditions to Closing of the Business Combination,” (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions) or at such other date as ARYA and Cerevel may agree in writing;

 

   

“Condition Precedent Proposals” are to the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals, the Nasdaq Proposal and the Incentive Award Plan Proposal, collectively;

 

   

“Continental” are to Continental Stock Transfer & Trust Company;

 

   

“Domestication” are to the transfer by way of continuation and deregistration of ARYA from the Cayman Islands and the continuation and domestication of ARYA as a corporation incorporated in the State of Delaware;

 

   

“Effective Time” means the time at which the Merger becomes effective;

 

   

“ESPP” are to the New Cerevel 2020 Employee Stock Purchase Plan to be considered for adoption and approval by the shareholders pursuant to the Employee Stock Purchase Plan Proposal;

 

   

“extraordinary general meeting” are to the extraordinary general meeting of ARYA at 10:30 a.m., Eastern Time, on October 26, 2020, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, or at such other time, on such other date and at such other place to which the meeting may be adjourned;

 

   

“Existing Governing Documents” are to the Memorandum of Association and the Articles of Association;

 

   

“initial public offering” are to ARYA’s initial public offering that was consummated on June 9, 2020;

 

   

“Incentive Equity Plan” are to the Cerevel Therapeutics Holdings, Inc. 2020 Equity Incentive Plan to be considered for adoption and approval by the shareholders pursuant to the Incentive Award Plan Proposal;

 

   

“initial shareholders” are to Sponsor and each of Messrs. Bauer, Robins and Wider;

 

   

“Memorandum of Association” are to the amended and restated memorandum of association of ARYA;

 

   

“Merger” are to the merger of Cassidy Merger Sub with and into Cerevel pursuant to the Business Combination Agreement, with Cerevel as the surviving company in the Merger and, after giving effect to such Merger, Cerevel becoming a wholly-owned subsidiary of ARYA;

 

   

“Nasdaq” are to the Nasdaq Capital Market;

 

   

“New Cerevel” are to Cerevel Therapeutics Holdings, Inc. (f.k.a. ARYA Sciences Acquisition Corp II) upon and after the Domestication;

 

   

“New Cerevel Board” are to the board of directors of New Cerevel;

 

   

“New Cerevel Common Stock” are to the common stock, par value $0.0001 per share, of New Cerevel;

 

   

“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;

 

   

“Other PIPE Investors” are to certain other investors, the Perceptive PIPE Investor and Pfizer;

 

   

“Perceptive Advisors” are to Perceptive Advisors, LLC, an affiliate of our Sponsor;

 

   

“Perceptive PIPE Investor” are to Perceptive Life Sciences Master Fund Ltd, a Cayman Islands exempted company;

 

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“Perceptive Shareholders” are to the Sponsor and the Perceptive PIPE Investor;

 

   

“Pfizer” are to Pfizer Inc., a Delaware corporation;

 

   

“PIPE Financing” are to the transactions contemplated by the Subscription Agreements, pursuant to which the PIPE Investors have collectively committed to subscribe for an aggregate of 32,000,000 shares of New Cerevel Common Stock for an aggregate purchase price of $320,000,000 to be consummated in connection with Closing;

 

   

“PIPE Investors” are to the Bain Investor and the Other PIPE Investors, collectively;

 

   

“private placement shares” are to the 499,000 Class A ordinary shares of ARYA sold as part of the private placement units;

 

   

“private placement units” are to the 499,000 private placement units outstanding as of the date of this proxy statement/ prospectus that were issued to our Sponsor in a private placement simultaneously with the closing of our initial public offering, which are identical to the units sold in our initial public offering, subject to certain limited exceptions;

 

   

“private placement warrants” are to the 166,333 private placement warrants outstanding as of the date of this proxy statement/ prospectus that were issued to our Sponsor as part of the private placement units, which are substantially identical to the public warrants sold as part of the units in the initial public offering, subject to certain limited exceptions;

 

   

“pro forma” are to giving pro forma effect to the Business Combination, including the Merger and the PIPE Financing;

 

   

“Proposed Bylaws” are to the proposed bylaws of New Cerevel to be effective upon the Domestication attached to this proxy statement/prospectus as Annex D;

 

   

“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of New Cerevel to be effective upon the Domestication attached to this proxy statement/prospectus as Annex C;

 

   

“Proposed Governing Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws;

 

   

“public shareholders” are to holders of public shares, whether acquired in ARYA’s initial public offering or acquired in the secondary market;

 

   

“public shares” are to the currently outstanding 14,950,000 Class A ordinary shares of ARYA, whether acquired in ARYA’s initial public offering or acquired in the secondary market;

 

   

“public warrants” are to the currently outstanding 4,983,333 redeemable warrants to purchase Class A ordinary shares of ARYA that were issued by ARYA in its initial public offering;

 

   

“redemption” are to each redemption of public shares for cash pursuant to the Existing Governing Documents;

 

   

“Required Governing Documents Proposals” are to Governing Documents Proposal A and Governing Documents Proposal E;

 

   

“SEC” are to the Securities and Exchange Commission;

 

   

“Securities Act” are to the Securities Act of 1933, as amended;

 

   

“Sponsor” are to ARYA Sciences Holdings II, a Cayman Islands exempted limited company;

 

   

“Subscription Agreements” are to the subscription agreements, entered into by ARYA and each of the PIPE Investors in connection with the PIPE Financing;

 

   

“transfer agent” are to Continental, ARYA’s transfer agent;

 

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“trust account” are to the trust account established at the consummation of ARYA’s initial public offering that holds the proceeds of the initial public offering and is maintained by Continental, acting as trustee;

 

   

“units” are to the units of ARYA, each unit representing one Class A ordinary share and one-third of one warrant to acquire one Class A ordinary share, that were offered and sold by ARYA in its initial public offering and in its concurrent private placement; and

 

   

“warrants” are to the public warrants and the private placement warrants.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. The information included in this proxy statement/prospectus in relation to Cerevel has been provided by Cerevel and its respective management, and forward-looking statements include statements relating to our and its respective management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

our ability to complete the Business Combination with Cerevel or, if we do not consummate such Business Combination, any other initial business combination;

 

   

satisfaction or waiver of the conditions to the Business Combination including, among others: (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the Hart-Scott-Rodino Act of 1976 (the “HSR Act”) relating to the Business Combination Agreement having expired or been terminated; (iii) ARYA having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing; (iv) the Aggregate Transaction Proceeds Condition; (v) the approval by Nasdaq of our initial listing application in connection with the Business Combination; (vi) there being immediately following the Effective Time, to the knowledge of ARYA, no single beneficial owner of New Cerevel Common Stock (other than the Bain Investor, Pfizer or the Perceptive Shareholders) of greater than 9.9% and no three beneficial owners of shares of ARYA’s ordinary shares (other than the Bain Investor, Pfizer and the Perceptive Shareholders) of greater than 25% and (vii) the consummation of the Domestication;

 

   

the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against ARYA and Cerevel following the announcement of the Business Combination Agreement and the transactions contemplated therein, that could give rise to the termination of the Business Combination Agreement;

 

   

the projected financial information, growth rate and market opportunity of New Cerevel;

 

   

the ability to obtain and/or maintain the listing of the New Cerevel Common Stock and the warrants on the Nasdaq Stock Market, and the potential liquidity and trading of such securities;

 

   

the risk that the proposed Business Combination disrupts current plans and operations of Cerevel as a result of the announcement and consummation of the proposed Business Combination;

 

   

the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably and retain its key employees;

 

   

costs related to the proposed Business Combination;

 

   

changes in applicable laws or regulations;

 

   

our ability to raise financing in the future;

 

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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination;

 

   

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving the Business Combination;

 

   

the success, cost and timing of Cerevel’s product development activities and clinical trials, including statements regarding its registration-directed Phase 3 program for tavapadon, Cerevel’s plans for clinical development of its other product candidates and the initiation and completion of any other clinical trials and related preparatory work, the expected timing of the availability of results of the clinical trials;

 

   

Cerevel’s ability to recruit and enroll suitable patients in its clinical trials;

 

   

the potential attributes and benefits of Cerevel’s product candidates;

 

   

Cerevel’s ability to obtain and maintain regulatory approval for Cerevel’s product candidates, and any related restrictions, limitations or warnings in the label of an approved product candidate;

 

   

Cerevel’s ability to obtain funding for its operations, including funding necessary to complete further development, approval and, if approved, commercialization of Cerevel’s product candidates;

 

   

the period over which Cerevel anticipates its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements;

 

   

the potential for Cerevel’s business development efforts to maximize the potential value of its portfolio;

 

   

Cerevel’s ability to identify, in-license or acquire additional product candidates;

 

   

Cerevel’s ability to maintain the Pfizer License Agreement underlying Cerevel’s product candidates;

 

   

Cerevel’s ability to compete with other companies currently marketing or engaged in the development of treatments for the indications that Cerevel is pursuing for Cerevel’s product candidates;

 

   

Cerevel’s expectations regarding its ability to obtain and maintain intellectual property protection for Cerevel’s product candidates and the duration of such protection;

 

   

Cerevel’s ability to contract with and rely on third parties to assist in conducting its clinical trials and manufacture Cerevel’s product candidates;

 

   

the size and growth potential of the markets for Cerevel’s product candidates, and its ability to serve those markets, either alone or in partnership with others;

 

   

the rate and degree of market acceptance of Cerevel’s product candidates, if approved;

 

   

the pricing and reimbursement of Cerevel’s product candidates, if approved;

 

   

regulatory developments in the United States and foreign countries;

 

   

the impact of laws and regulations;

 

   

Cerevel’s ability to attract and retain key scientific, medical, commercial or management personnel;

 

   

Cerevel’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

 

   

Cerevel’s financial performance;

 

   

the effect of COVID-19 on the foregoing, including our ability to consummate the Business Combination due to the uncertainty resulting from the recent COVID-19 pandemic; and

 

   

other factors detailed under the section entitled “Risk Factors.”

 

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The forward-looking statements contained in this proxy statement/prospectus are based on current expectations and beliefs concerning future developments and their potential effects on us and/or Cerevel. There can be no assurance that future developments affecting us and/or Cerevel will be those that we and/or the Cerevel have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control or the control of Cerevel) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. Neither we nor Cerevel undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any shareholder grants its proxy or instructs how its vote should be cast or vote on the proposals to be put to the extraordinary general meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect us.

 

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QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF ARYA

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to ARYA’s shareholders. We urge shareholders to read this proxy statement/prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting, which will be held at 10:30 a.m., Eastern Time, on October 26, 2020, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

ARYA shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Business Combination Agreement and approve the transactions contemplated thereby, including the Business Combination. In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things, in connection with the Domestication, on the Closing Date prior to the Effective Time, (i) ARYA will be renamed “Cerevel Therapeutics Holdings, Inc.”, (ii) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (iii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (ii). See “Business Combination Proposal.”

A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annexes A-1 and A-2 and you are encouraged to read the Business Combination Agreement in its entirety.

The approval of each of the Business Combination Proposal, the Governing Documents Proposal A, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, and each of the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D and the Governing Documents Proposal E requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

In connection with the Domestication, on the Closing Date prior to the Effective Time, (i) each issued and outstanding Class A ordinary share and each issued and outstanding Class B ordinary share of ARYA will convert automatically by operation of law, on a one-for-one basis, into shares of New Cerevel Common Stock; (ii) each issued and outstanding warrant to purchase Class A ordinary shares of ARYA will automatically represent the right to purchase one share of New Cerevel Common Stock at an exercise price of $11.50 per shares of New Cerevel Common Stock on the terms and conditions set forth in the warrant agreement; and (iii) each issued and outstanding unit of ARYA that has not been previously separated into the underlying Class A ordinary share and underlying warrant upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New Cerevel Common Stock and one-third of one warrant to acquire one share of New Cerevel Common Stock. The Proposed Governing Documents will be appropriately adjusted to give effect to any amendments contemplated by the Proposed Governing Documents that are not adopted and approved by the ARYA shareholders, other than the amendments to the ARYA governing documents that are contemplated by the Required Governing Documents Proposals,

 

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which are a condition to the Closing of the Business Combination. In connection with clause (i) and (ii), each issued and outstanding unit of ARYA that has not previous been previously separated into the underlying Class A ordinary shares of ARYA and underlying ARYA warrants prior to the Domestication will be cancelled and will entitle the holder thereof to one share of New Cerevel Common Stock and one-third of one warrant representing the right to purchase one share of New Cerevel Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions set forth in the ARYA warrant agreement. See “Domestication Proposal.”

The provisions of the Proposed Governing Documents will differ in certain material respects from the Existing Governing Documents. Please see “What amendments will be made to the current constitutional documents of ARYA?” below.

THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS.

 

Q:

What proposals are shareholders of ARYA being asked to vote upon?

 

A:

At the extraordinary general meeting, ARYA is asking holders of its ordinary shares to consider and vote upon eleven (11) separate proposals:

 

   

a proposal to approve by ordinary resolution and adopt the Business Combination Agreement, including the Merger, and the transactions contemplated thereby;

 

   

a proposal to approve by special resolution the Domestication;

 

   

the following five (5) separate proposals to approve by special resolution (unless stated otherwise) the following material differences between the Existing Governing Documents and the Proposed Governing Documents:

 

   

to authorize by way of ordinary resolution the change in the authorized share capital of ARYA from US$50,000 divided into (i) 479,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) 500,000,000 shares of New Cerevel Common Stock and 10,000,000 shares of New Cerevel Preferred Stock;

 

   

to authorize the New Cerevel Board to issue any or all shares of New Cerevel Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New Cerevel Board and as may be permitted by the DGCL;

 

   

to provide that certain provisions of the certificate of incorporation of New Cerevel are subject to the Amended and Restated Registration and Shareholder Rights Agreement;

 

   

to authorize the removal of the ability of New Cerevel stockholders to take action by written consent in lieu of a meeting; and

 

   

to amend and restate the Existing Governing Documents and authorize all other changes necessary or, as mutually agreed in good faith by ARYA and Cerevel, desirable in connection with the replacement of Existing Governing Documents with the Proposed Governing Documents as part of the Domestication;

 

   

a proposal to approve by ordinary resolution shares of New Cerevel Common Stock in connection with the Business Combination and the PIPE Financing in compliance with the Nasdaq Listing Rules;

 

   

a proposal to approve and adopt by ordinary resolution the Incentive Equity Plan;

 

   

a proposal to approve and adopt by ordinary resolution the ESPP; and

 

   

a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to, among other things, permit further solicitation and vote of proxies

 

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in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting.

If our shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Business Combination Agreement are waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated.

For more information, please see “Business Combination Proposal,” “Domestication Proposal,” “Governing Documents Proposals,” “Nasdaq Proposal,” “Incentive Award Plan Proposal,” “Employee Stock Purchase Plan Proposal” and “Adjournment Proposal.”

ARYA will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of ARYA should read it carefully.

After careful consideration, the ARYA Board has determined that the Business Combination Proposal, the Domestication Proposal, each of the Governing Documents Proposals, the Nasdaq Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal are in the best interests of ARYA and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of ARYA’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of ARYA and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, ARYA’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of ARYA’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

Why is ARYA proposing the Business Combination?

 

A:

ARYA is a blank check company incorporated on February 20, 2020 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although ARYA may pursue an acquisition opportunity in any business, industry, sector or geographical location for purposes of consummating an initial business combination, ARYA has focused on North American companies in the life sciences and medical technology sectors. ARYA is not permitted under its Existing Governing Documents to effect a business combination with a blank check company or a similar type of company with nominal operations.

ARYA has identified several criteria and guidelines it believes are important for evaluating acquisition opportunities. ARYA has sought to acquire companies that: have a scientific or other competitive advantage in the markets in which they operate and which can benefit from access to additional capital as well as ARYA’s industry relationships and expertise; are ready to be public, with strong management, corporate governance and reporting policies in place; will likely be well received by public investors and are expected to have good access to the public capital markets; have significant embedded and/or underexploited growth opportunities; exhibit unrecognized value or other characteristics that ARYA believes have been misevaluated by the market based on its rigorous analysis and scientific and business due diligence review; and will offer attractive risk-adjusted equity returns for ARYA shareholders.

Based on its due diligence investigations of Cerevel and the industry in which it operates, including the financial and other information provided by Cerevel in the course of negotiations, the ARYA Board believes that Cerevel meets the criteria and guidelines listed above. However, there is no assurance of this. See “Business Combination Proposal—The ARYA Board’s Reasons for the Business Combination.”

 

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Although the ARYA Board believes that the Business Combination with Cerevel presents a unique business combination opportunity and is in the best interests of ARYA and its shareholders, the board of directors did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the sections entitled “Business Combination Proposal—The ARYA Board’s Reasons for the Business Combination” and “Risk Factors—Risks Related to ARYA’s Business and to New Cerevel’s Business Following the Business Combination.”

 

Q:

Did the ARYA Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

No. The ARYA Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. However, ARYA’s management, the members of the ARYA Board and the other representatives of ARYA have substantial experience in evaluating the operating and financial merits of companies similar to Cerevel and reviewed certain financial information of Cerevel and compared it to certain publicly traded companies, selected based on the experience and the professional judgment of ARYA’s management team, which enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of the ARYA Board in valuing Cerevel’s business and assuming the risk that the ARYA Board may not have properly valued such business.

 

Q:

What will Cerevel’s equityholders receive in return for the Business Combination with ARYA?

 

A:

On the date of Closing, promptly following the consummation of the Domestication, Cassidy Merger Sub will merge with and into Cerevel, with Cerevel as the surviving company in the Merger and, after giving effect to such Merger, Cerevel shall be a wholly-owned subsidiary of ARYA. In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (i).

 

Q:

How will the combined company be managed following the business combination?

 

A:

Following the Closing, it is expected that the current management of Cerevel will become the management of New Cerevel, and the New Cerevel Board will consist of up to ten (10) directors, which will be divided into three classes (Class I, II and III) with Class I consisting of four directors and Class II and III each consisting of three directors. Pursuant to the Business Combination Agreement, the New Cerevel Board will consist of (i) eight (8) individuals designated by Cerevel prior to the mailing of this proxy statement to ARYA shareholders (all of whom are existing members of Cerevel’s board of directors), (ii) one vacant director position to be filled following the Effective Time in accordance with the Amended and Restated Registration and Shareholder Rights Agreement and the Proposed Governing Documents of New Cerevel, and (iii) one director to be mutually agreed by Cerevel and Sponsor prior to December 15, 2020, which director shall be appointed by the New Cerevel Board to serve as a director on the New Cerevel Board promptly after such individual is mutually agreed. Please see the section entitled “Management of New Cerevel Following the Business Combination” for further information.

 

Q:

What equity stake will current ARYA shareholders and current equityholders of Cerevel hold in New Cerevel immediately after the consummation of the Business Combination?

 

A:

As of the date of this proxy statement/prospectus, there are (i) 14,950,000 Class A ordinary shares outstanding underlying units issued in ARYA’s initial public offering, (ii) 499,000 Class A ordinary shares

 

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  outstanding underlying units issued in a private placement simultaneously with the closing of ARYA’s initial public offering, and (iii) 3,737,500 Class B ordinary shares outstanding held by ARYA’s initial shareholders. As of the date of this proxy statement/prospectus, there is outstanding 166,333 private placement warrants held by Sponsor and 4,983,333 public warrants. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of New Cerevel Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming that none of ARYA’s outstanding public shares are redeemed in connection with the Business Combination), ARYA’s fully-diluted share capital, giving effect to the exercise of all of the private placement warrants and public warrants, would be 24,336,166 ordinary shares.

The following table illustrates varying ownership levels in New Cerevel Common Stock immediately following the consummation of the Business Combination based on the varying levels of redemptions by the public shareholders and the following additional assumptions: (i) 76,263,673 shares of New Cerevel Common Stock are issued to the holders of shares of common stock (including the holders of vested restricted stock units that will settle prior to completion of the Business Combination) and preferred stock of Cerevel at Closing, which would be the number of shares of New Cerevel Common Stock issued to these holders if Closing were to occur on September 30, 2020; (ii) 32,000,000 shares of New Cerevel Common Stock are issued in the PIPE Financing or deemed issued in connection with any pre-funding by Bain Investor pursuant to its Subscription Agreement; (iii) no public warrants or private placement warrants to purchase New Cerevel Common Stock that will be outstanding immediately following Closing have been exercised; and (iv) no vested and unvested options to purchase shares of New Cerevel Common Stock that will be held by equity holders of Cerevel immediately following the Closing have been exercised. If the actual facts are different than these assumptions, the ownership percentages in New Cerevel will be different.

 

     Share Ownership in New Cerevel(1)  
     No redemptions     Maximum
redemptions(2)
 
     Percentage of
Outstanding
Shares
    Percentage of
Outstanding
Shares
 

Bain Investor(3)

     47.08     53.34

Pfizer(4)

     21.49     24.35

ARYA public shareholders(5)

     11.73     0.00

Perceptive PIPE Investor and our initial shareholders(6)(7)

     5.68     6.43

Other PIPE Investors(8)

     13.97     15.82

Other Cerevel Stockholders(9)

     0.06     0.06

 

  (1)

The number of shares of New Cerevel Common Stock issued to the holders of shares of common stock and preferred stock of Cerevel at Closing will fluctuate based the number of shares underlying vested Cerevel options (and the exercise price of such options) and restricted stock units at Closing, but will in no event exceed 78,000,000 shares of New Cerevel Common Stock. Vested Cerevel options and restricted stock units are taken into account for purposes of allocating the implied $780,000,000 equity value of Cerevel among the holders of shares and vested equity awards of Cerevel, with the value allocable to such vested options being determined based on the treasury stock method.

  (2)

Assumes that, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, all of ARYA’s outstanding public shares are redeemed in connection with the Business Combination.

  (3)

Includes 10,000,000 shares acquired in the PIPE Financing or deemed acquired in connection with any pre-funding by Bain Investor pursuant to its Subscription Agreement.

  (4)

Includes 1,200,000 shares acquired in the PIPE Financing.

  (5)

Excludes shares acquired by certain public investors in connection with the PIPE Financing.

  (6)

Includes 3,000,000 shares acquired by the Perceptive PIPE Investor in the PIPE Financing.

 

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  (7)

Includes 4,236,500 shares held by the Initial Shareholders originally acquired prior to or in connection with ARYA’s initial public offering (including 30,000 shares held by each of Todd Wider, Chad Robins and Jake Bauer).

  (8)

Excludes shares acquired by Bain Investor, Pfizer and the Perceptive PIPE Investor in the PIPE Financing.

  (9)

Represents shares of common stock of Cerevel acquired upon vesting of restricted stock units, which shares will be converted to shares of New Cerevel Common Stock in connection with the Business Combination. Excludes restricted stock units that will not be vested immediately following the Closing.

For further details, see “Business Combination Proposal—Consideration to Cerevel Equityholders in the Business Combination.”

 

Q:

Why is ARYA proposing the Domestication?

 

A:

Our board of directors believes that there are significant advantages to us that will arise as a result of a change of our domicile to Delaware. Further, our board of directors believes that any direct benefit that the Delaware General Corporation Law (the “DGCL”) provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. The board of directors believes that there are several reasons why transfer by way of continuation to Delaware is in the best interests of ARYA and its shareholders, including, (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors, each of the foregoing are discussed in greater detail in the section entitled “Domestication Proposal—Reasons for the Domestication.”

To effect the Domestication, we will file an application for deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of corporate domestication and a certificate of incorporation with the Secretary of State of the State of Delaware, under which we will be domesticated and continue as a Delaware corporation.

The approval of the Domestication Proposal is a condition to closing the Business Combination under the Business Combination Agreement. The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal.

 

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Q:

What amendments will be made to the current constitutional documents of ARYA?

 

A:

The consummation of the Business Combination is conditional, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, ARYA’s shareholders also are being asked to consider and vote upon a proposal to approve the Domestication, and replace ARYA’s Existing Governing Documents, in each case, under Cayman Islands law with the Proposed Governing Documents, in each case, under the DGCL, which differ from the Existing Governing Documents in the following material respects:

 

    

Existing Governing Documents

  

Proposed Governing Documents

Authorized Shares
(Governing Documents
Proposal A)
   The share capital under the Existing Governing Documents is US$50,000 divided into 479,000,000 Class A ordinary shares of par value US$0.0001 per share, 20,000,000 Class B ordinary shares of par value US$0.0001 per share and 1,000,000 preference shares of par value US$0.0001 per share.    The Proposed Governing Documents authorize 500,000,000 shares of New Cerevel Common Stock and 10,000,000 shares of New Cerevel Preferred Stock.
   See paragraph 8 of the Memorandum of Association.    See Article IV of the Proposed Certificate of Incorporation.
Authorize the Board of Directors to Issue Preferred Stock Without Stockholder Consent
(Governing Documents
Proposal B)
   The Existing Governing Documents authorize the issuance of 1,000,000 preference shares with such designation, rights and preferences as may be determined from time to time by our board of directors. Accordingly, our board of directors is empowered under the Existing Governing Documents, without shareholder approval, to issue preference shares with dividend, liquidation, redemption, voting or other rights which could adversely affect the voting power or other rights of the holders of ordinary shares.    The Proposed Governing Documents authorize the board of directors to issue all or any shares of preferred stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as the board of directors may determine.
   See paragraph 8 of the Memorandum of Association and Article 3 of the Articles of Association.    See Article IV subsection B of the Proposed Certificate of Incorporation.
Amended and Restated Registration and Shareholder Rights Agreement
(Governing Documents
Proposal C)
   The Existing Governing Documents are not subject to any director composition agreement.    The Proposed Governing Documents provide that certain provisions therein are subject to the Amended and Restated Registration and Shareholder Rights Agreement.
      See Article VI subsections 3, 4 and 5 of the Proposed Certificate of Incorporation.

 

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Existing Governing Documents

  

Proposed Governing Documents

Shareholder/Stockholder Written Consent In Lieu of a Meeting
(Governing Documents
Proposal D)
   The Existing Governing Documents provide that resolutions may be passed by a vote in person, by proxy at a general meeting, or by unanimous written resolution.    The Proposed Governing Documents allow stockholders to vote in person or by proxy at a meeting of stockholders, but prohibit the ability of stockholders to act by written consent in lieu of a meeting.
   See Articles 14 and 15 of our Articles of Association.    See Article V subsection 1 of the Proposed Certificate of Incorporation.
Corporate Name
(Governing Documents
Proposal E)
  

The Existing Governing Documents provide the name of the company is “ARYA Sciences Acquisition Corp II”

 

See paragraph 1 of our Memorandum of Association.

  

The Proposed Governing Documents will provide that the name of the corporation will be “Cerevel Therapeutics Holdings, Inc.”

 

See Article I of the Proposed Certificate of Incorporation.

Perpetual Existence
(Governing Documents
Proposal E)
   The Existing Governing Documents provide that if we do not consummate a business combination (as defined in the Existing Governing Documents) by June 9, 2022 (twenty-fourth months after the closing of ARYA’s initial public offering), ARYA will cease all operations except for the purposes of winding up and will redeem the shares issued in ARYA’s initial public offering and liquidate its trust account.    The Proposed Governing Documents do not include any provisions relating to New Cerevel’s ongoing existence; the default under the DGCL will make New Cerevel’s existence perpetual.
   See Article 38 of our Articles of Association.    This is the default rule under the DGCL.
Exclusive Forum
(Governing Documents
Proposal E)
   The Existing Governing Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation.    The Proposed Governing Documents adopt Delaware as the exclusive forum for certain stockholder litigation and the United States District Court for the District of Massachusetts as the exclusive forum for litigation arising out of the Securities Act.
      See Section 8 of the Proposed Bylaws.
Takeovers by Interested Stockholders
(Governing Documents
Proposal E)
   The Existing Governing Documents do not provide restrictions on takeovers of ARYA    The Proposed Governing Documents will have New Cerevel elect not to be governed by Section 203 of the DGCL

 

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Existing Governing Documents

  

Proposed Governing Documents

   by a related shareholder following a business combination.    relating to takeovers by interested stockholders but will provide other restrictions regarding takeovers by interested stockholders.
      See Article X subsections 1 and 2 of the Proposed Certificate of Incorporation.
Provisions Related to Status as Blank Check Company
(
Governing Documents
Proposal E)
   The Existing Governing Documents set forth various provisions related to our status as a blank check company prior to the consummation of a business combination.    The Proposed Governing Documents do not include such provisions related to our status as a blank check company, which no longer will apply upon consummation of the Business Combination, as we will cease to be a blank check company at such time.
   See Article 38 of our Articles of Association.   

 

Q:

How will the Domestication affect my ordinary shares, warrants and units?

 

A:

In connection with the Domestication, on the Closing Date prior to the Effective Time, (i) each issued and outstanding Class A ordinary share and each issued and outstanding Class B ordinary share of ARYA will convert automatically by operation of law, on a one-for-one basis, into shares of New Cerevel Common Stock; (ii) each issued and outstanding warrant to purchase Class A ordinary shares of ARYA will automatically represent the right to purchase one share of New Cerevel Common Stock at an exercise price of $11.50 per shares of New Cerevel Common Stock on the terms and conditions set forth in the warrant agreement; and (iii) each issued and outstanding unit of ARYA that has not been previously separated into the underlying Class A ordinary share and underlying warrant upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New Cerevel Common Stock and one-third of one warrant to acquire one share of New Cerevel Common Stock. See “Domestication Proposal.

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (i).

 

Q:

What are the U.S. federal income tax consequences of the Domestication?

 

A:

As discussed more fully under “U.S. Federal Income Tax Considerations,” the Domestication generally should constitute a tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as ARYA, this result is not entirely clear. In the case of a transaction, such as the Domestication, that should qualify as a tax-deferred reorganization within the meaning of Section

 

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  368(a)(1)(F), U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders” below) will be subject to Section 367(b) of the Code and, as a result of the Domestication:

 

   

a U.S. Holder whose public shares have a fair market value of less than $50,000 on the date of the Domestication generally will not recognize any gain or loss and will not be required to include any part of ARYA’s earnings in income;

 

   

a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock generally will recognize gain (but not loss) on the exchange of public shares for shares of New Cerevel Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its public shares provided certain other requirements are satisfied; and

 

   

a U.S. Holder whose public shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock generally will be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its public shares provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (participation exemption).

ARYA does not expect to have significant cumulative earnings and profits through the date of the Domestication.

If ARYA were to be treated as a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes, certain U.S. Holders may be subject to adverse tax consequences as a result of the Domestication. However, provided the Domestication is completed in 2020, ARYA believes that it is likely that it will not be classified as a PFIC because it will qualify for an exception to the PFIC rules known as the “start-up exception.” The requirement to qualify for the start-up exception and the potential application of the PFIC rules to the Domestication are discussed more fully under “U.S. Federal Income Tax Considerations—U.S. Holders—PFIC Considerations.

Additionally, the Domestication may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—Non-U.S. Holders”) to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such non-U.S. Holder’s shares of New Cerevel Common Stock after the Domestication.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor on the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “U.S. Federal Income Tax Considerations.

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders (other than those who have agreed not to do so by executing an ARYA Shareholder Transaction Support Agreement) may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?

 

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Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The initial shareholders have agreed to waive their redemption rights with respect to all of their ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

 

Q:

How do I exercise my redemption rights?

 

A:

In connection with the proposed Business Combination, pursuant to the Existing Governing Documents, ARYA’s public shareholders (other than those who have agreed not to do so by executing an ARYA Shareholder Transaction Support Agreement) may request that ARYA redeem all or a portion of such public shares for cash if the Business Combination is consummated. If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental, ARYA’s transfer agent, in which you (i) request that we redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

 

  (iii)

deliver your public shares to Continental, our transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on October 22, 2020 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

The address of Continental, ARYA’s transfer agent, is listed under the question “Who can help answer my questions?” below.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, our transfer agent, directly and instruct them to do so.

Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, as of September 30, 2020, this would have amounted to approximately $10.005 per issued and outstanding public share. However, the proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders, regardless of whether such public shareholders vote or, if they do vote, irrespective of if they vote for or against the Business Combination Proposal. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote irrespective of how you vote, on any proposal, including the Business Combination Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.

 

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Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting. If you deliver your shares for redemption to Continental, our transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that our transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, our transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, our transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental, our transfer agent, at least two business days prior to the vote at the extraordinary general meeting.

If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, we will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination. The redemption takes place following the Domestication and, accordingly, it is shares of New Cerevel Common Stock that will be redeemed immediately after consummation of the Business Combination.

If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.

 

Q:

If I am a holder of units, can I exercise redemption rights with respect to my units?

 

A:

No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, our transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. You are requested to cause your public shares to be separated and delivered to Continental, our transfer agent, by 5:00 p.m., Eastern Time, on October 22, 2020 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

We expect that a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations—U.S. Holders”) that exercises its redemption rights to receive cash from the trust account in exchange for its shares of New Cerevel Common Stock will generally be treated as selling such shares of New Cerevel Common Stock resulting in the recognition of capital gain or capital loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of shares of New Cerevel Common Stock that such U.S. Holder owns or is deemed to own (including through the ownership of warrants) prior to and following the redemption. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “U.S. Federal Income Tax Considerations.

Additionally, because the Domestication will occur immediately prior to the redemption by any public shareholder, U.S. Holders exercising redemption rights will take into account the potential tax consequences of Section 367(b) of the Code. If we do not qualify for the start-up exception to the PFIC rules (e.g., in the unlikely event that the Domestication is not completed in 2020), U.S. Holders exercising redemption rights would also be subject to the potential tax consequences of the U.S. federal income tax rules relating to PFICs. The tax consequences of the exercise of redemption rights, including pursuant to Section 367(b) of the Code and the PFIC rules, are discussed more fully below under “U.S. Federal Income Tax

 

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Considerations—U.S. Holders.” All holders of our public shares considering exercising their redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws.

 

Q:

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A:

Following the closing of our initial public offering, an amount equal to $149,500,000 ($10.00 per unit) of the net proceeds from our initial public offering and the sale of the private placement units was placed in the trust account. As of September 30, 2020, funds in the trust account totaled approximately $149,572,055 and were held in U.S. treasury securities. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (i) the completion of a business combination (including the closing of the Business Combination) or (ii) the redemption of all of the public shares if we are unable to complete a business combination by June 9, 2022 (unless such date is extended in accordance with the Existing Governing Documents), subject to applicable law.

If our initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions or purchases of the public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of New Cerevel, the payment of principal or interest due on indebtedness incurred in completing our Business Combination, to fund the purchase of other companies or for working capital. See “Summary of the Proxy Statement/Prospectus—Sources and Uses of Funds for the Business Combination.”

 

Q:

What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

A:

Our public shareholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders.

In no event will ARYA redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing.

Additionally, as a result of redemptions, the trading market for the New Cerevel Common Stock may be less liquid than the market for the public shares was prior to consummation of the Business Combination and we may not be able to meet the listing standards for Nasdaq or another national securities exchange.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Business Combination Agreement having expired or been terminated; (iii) ARYA having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing; (iv) the Aggregate Transaction Proceeds Condition; (v) the approval by Nasdaq of our initial listing application in connection with the Business Combination; (vi) there being immediately following the Effective Time, to the knowledge of ARYA, no single beneficial

 

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  owner of ordinary shares (other than the Bain Investor, Pfizer or the Perceptive Shareholders) of greater than 9.9% and no three beneficial owners of shares of ARYA’s ordinary shares (other than the Bain Investor, Pfizer and the Perceptive Shareholders) of greater than 25%, and (vii) the consummation of the Domestication. Therefore, unless these conditions are waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated.

For more information about conditions to the consummation of the Business Combination, see “Business Combination Proposal—Conditions to Closing of the Business Combination.”

 

Q:

When do you expect the Business Combination to be completed?

 

A:

It is currently expected that the Business Combination will be consummated in the fourth quarter of 2020. This date depends, among other things, on the approval of the proposals to be put to ARYA shareholders at the extraordinary general meeting. However, such extraordinary general meeting could be adjourned if the Adjournment Proposal is adopted by our shareholders at the extraordinary general meeting and we elect to adjourn the extraordinary general meeting to a later date or dates to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to ARYA shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient ARYA ordinary shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting, (B) in order to solicit additional proxies from ARYA shareholders in favor of one or more of the proposals at the extraordinary general meeting or (C) if ARYA shareholders redeem an amount of public shares such that the Aggregate Transaction Proceeds Condition would not be satisfied. For a description of the conditions for the completion of the Business Combination, see “Business Combination Proposal—Conditions to Closing of the Business Combination.”

 

Q:

What happens if the Business Combination is not consummated?

 

A:

ARYA will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Business Combination Agreement. If ARYA is not able to consummate the Business Combination with Cerevel nor able to complete another business combination by June 9, 2022, in each case, as such date may be extended pursuant to our Existing Governing Documents, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable laws.

 

Q:

Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?

 

A:

Neither our shareholders nor our warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

 

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Q:

What do I need to do now?

 

A:

We urge you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder and/or warrant holder. Our shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

 

Q:

How do I vote?

 

A:

If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, and were a holder of record of ordinary shares on September 4, 2020, the record date for the extraordinary general meeting, you may vote with respect to the proposals in person or virtually at the extraordinary general meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. For the avoidance of doubt, the record date does not apply to ARYA shareholders that hold their shares in registered form and are registered as shareholders in ARYA’s register of members. All holders of shares in registered form on the day of the extraordinary general meeting are entitled to vote at the extraordinary general meeting.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. If you decide to vote, you should provide instructions to your broker, bank or other nominee on how to vote in accordance with the information and procedures provided to you by your broker, bank or other nominee.

 

Q:

When and where will the extraordinary general meeting be held?

 

A:

The extraordinary general meeting will be held at 10:30 a.m., Eastern Time, on October 26, 2020, at the offices of Kirkland & Ellis LLP, located at 601 Lexington Avenue, New York, New York 10022, unless the extraordinary general meeting is adjourned.

 

Q:

How will the COVID-19 pandemic impact in-person voting at the General Meeting?

 

A:

We intend to hold the extraordinary general meeting in person. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving coronavirus (COVID-19) situation. As a result, we may impose additional procedures or limitations on meeting attendees. We plan to announce any such updates in a press release filed with the SEC and on our proxy website at https://www.cstproxy.com/aryasciencesacquisitioncorpii/sm2020, and we encourage you to check this website prior to the meeting if you plan to attend.

 

Q:

What impact will the COVID-19 Pandemic have on the Business Combination?

 

A:

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the coronavirus outbreak on the business of ARYA and Cerevel, and there is no guarantee that efforts by ARYA

 

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  and Cerevel to address the adverse impacts of the coronavirus will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. If ARYA or Cerevel are unable to recover from a business disruption on a timely basis, the Business Combination and New Cerevel’s business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus outbreak and become more costly. Each of ARYA and Cerevel may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations.

 

Q:

Who is entitled to vote at the extraordinary general meeting?

 

A:

We have fixed September 4, 2020 as the record date for the extraordinary general meeting. If you were a shareholder of ARYA at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting.

 

Q:

How many votes do I have?

 

A:

ARYA shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 19,186,500 ordinary shares issued and outstanding, of which 14,950,000 were issued and outstanding public shares.

 

Q:

What constitutes a quorum?

 

A:

A quorum of ARYA shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold not less than a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 9,593,251 ordinary shares would be required to achieve a quorum.

 

Q:

What vote is required to approve each proposal at the extraordinary general meeting?

 

A:

The following votes are required for each proposal at the extraordinary general meeting:

 

  (i)

Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (ii)

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (iii)

Governing Documents Proposals: The separate approval of each of the Governing Documents Proposals requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, save for Governing Documents Proposal A, which proposes to amend ARYA’s authorized share capital and which will require an ordinary resolution, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

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  (iv)

Nasdaq Proposal: The approval of the Nasdaq Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (v)

Incentive Award Plan Proposal: The approval of the Incentive Award Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (vi)

Employee Stock Purchase Plan Proposal: The approval of the Employee Stock Purchase Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (vii)

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

As of the record date, ARYA had 19,186,500 ordinary shares issued and outstanding. ARYA shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. 4,723,002 ordinary shares are subject to the ARYA Shareholder Transaction Support Agreements, pursuant to which certain holders of ARYA’s Class A ordinary shares participating in the PIPE Financing agreed to vote all of their shares in favor of the Business Combination. 14,463,498 ordinary shares are not subject to the ARYA Shareholder Transaction Support Agreements. For additional information regarding the ARYA Shareholder Transaction Support Agreements, see “Business Combination Proposal—Related Agreements—Transaction Support Agreements.”

Assuming all holders that are entitled to vote on such matter vote all of their ordinary shares in person or by proxy, 9,593,251 shares, of which 4,870,248 shares are not subject to the ARYA Shareholder Transaction Support Agreements, will need to be voted in favor of each of the Business Combination Proposal, the Nasdaq Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal in order to approve each of the Business Combination Proposal, the Nasdaq Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal.

Assuming all holders that are entitled to vote on such matter vote all of their ordinary shares in person or by proxy, 12,791,001 shares, of which 8,067,998 shares are not subject to the ARYA Shareholder Transaction Support Agreements, will need to be voted in favor of the Domestication Proposal and each of the Governing Documents Proposals in order to approve the Domestication Proposal and each of the Governing Documents Proposals.

 

Q:

What are the recommendations of the ARYA Board?

 

A:

The ARYA Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of ARYA and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Governing Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of ARYA’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of ARYA and its shareholders and what he or they may believe is best for himself or themselves in

 

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determining to recommend that shareholders vote for the proposals. In addition, ARYA’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of ARYA’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

How do Sponsor and the other initial shareholders intend to vote their shares?

 

A:

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, our initial shareholders have agreed to vote all their shares in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, our initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, our initial shareholders, Cerevel and/or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our initial shareholders, Cerevel and/or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposal A, the Nasdaq Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter (ii) the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D and the Governing Documents Proposal E are approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (iii) otherwise limit the number of public shares electing to redeem and (iv) New Cerevel’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing.

Entering into any such arrangements may have a depressive effect on the ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he or she owns, either at or prior to the Business Combination.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold.

Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

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Q:

What happens if I sell my ARYA ordinary shares before the extraordinary general meeting?

 

A:

The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. Shareholders may send a later-dated, signed proxy card to our general counsel at our address set forth below so that it is received by our general counsel prior to the vote at the extraordinary general meeting (which is scheduled to take place on October 26, 2020) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to our general counsel, which must be received by our general counsel prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.

 

Q:

What happens if I fail to take any action with respect to the extraordinary general meeting?

 

A:

If you fail to vote with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder and/or warrant holder of New Cerevel. If you fail to vote with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder and/or warrant holder of ARYA. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting?

 

A:

ARYA will pay the cost of soliciting proxies for the extraordinary general meeting. ARYA has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies for the extraordinary general meeting. ARYA has agreed to pay Morrow a fee of $22,500, plus disbursements, and will reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. ARYA will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of Class A ordinary shares and in obtaining voting instructions from those owners. ARYA’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Where can I find the voting results of the extraordinary general meeting?

 

A:

The preliminary voting results will be announced at the extraordinary general meeting. ARYA will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting.

 

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Q:

Who can help answer my questions?

 

A:

If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

Morrow Sodali LLC

470 West Avenue

Stamford, Connecticut 06902

Tel: (800) 662-5200

Banks and brokers call collect: (203) 658-9400

E-mail: ARYB.info@investor.morrowsodali.com

You also may obtain additional information about ARYA from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information; Incorporation by Reference.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your public shares (either physically or electronically) to Continental, ARYA’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on October 22, 2020 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meeting, including the Business Combination, you should read this proxy statement/prospectus, including the Annexes and other documents referred to herein, carefully and in their entirety. The Business Combination Agreement is the legal document that governs the Business Combination and the other transactions that will be undertaken in connection with the Business Combination. The Business Combination Agreement is also described in detail in this proxy statement/prospectus in the section entitled “Business Combination Proposal—The Business Combination Agreement.”

Business Summary

Unless otherwise indicated or the context otherwise requires, references in this Business Summary to “we,” “us,” “our” and other similar terms refer to Cerevel and its subsidiaries prior to the Business Combination and to New Cerevel and its consolidated subsidiaries after giving effect to the Business Combination.

Company Overview

We are a clinical-stage biopharmaceutical company that combines a deep understanding of disease-related biology and neurocircuitry of the brain with advanced chemistry and central nervous system, or CNS, target receptor selective pharmacology to discover and design new therapies. We seek to transform the lives of patients through the development of new therapies for neuroscience diseases, including schizophrenia, epilepsy and Parkinson’s disease. Our “ready-made” pipeline of 11 small molecule programs, which includes five clinical-stage product candidates, was developed through over twenty years of research and investment by Pfizer and is supported by an initial capital commitment from an affiliate of Bain Capital and a keystone equity position from Pfizer. We are advancing our broad and diverse pipeline with at least eight clinical trials underway or expected to start by the end of 2021. We have built a highly experienced team of senior leaders and neuroscience drug developers who combine a nimble, results-driven biotech mindset with the proven expertise of large pharmaceutical company experience and capabilities in drug discovery and development.

Our portfolio of product candidates is based on a differentiated understanding of the neurocircuitry of CNS diseases, as well as the key pillars of our unique approach: (1) receptor-drug interactions at the atomic level to achieve targeted receptor subtype selectivity; (2) orthosteric and allosteric chemistry to achieve ideal receptor pharmacology; and (3) robust packages of preclinical and clinical data that elucidate the key points of differentiation for our compounds. Our rational design approach uses measured and calculated structural and surface charge information from the target protein combined with high-resolution crystallography data, computational homology models, screening of single-residue mutant proteins, indirect solution-phase imaging techniques and other biophysical measurements to glean key molecular-level information about the interaction between a target protein and our product candidates. These insights then drive structure-informed design of subsequent molecules. Due to our understanding of the specificity and dynamic range of neural networks and how to modulate them, we believe that our product candidates have the potential to achieve optimal therapeutic activity while minimizing unintended side effects of currently available therapies.

We are developing CVL-231 for the treatment of schizophrenia. CVL-231 was rationally designed as a positive allosteric modulator, or PAM, that selectively targets the muscarinic acetylcholine 4, or M4, receptor subtype to harness the anti-psychotic benefit believed to be associated with M4 while minimizing the side effects typically associated with pan-muscarinic agonists. We believe CVL-231 has the potential to mark a significant medical advancement as the muscarinic acetylcholine pathway has long been associated with mediation of neurotransmitter imbalance and psychosis. To our knowledge, CVL-231 is the only M4-selective PAM currently



 

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in clinical development. We are currently conducting a Phase 1b multiple ascending dose, or MAD, and pharmacokinetic/pharmacodynamic, or PK/PD, trial of CVL-231 in patients with schizophrenia, with data expected in the second half of 2021.

CVL-231 demonstrated robust activity in multiple preclinical psychosis models, including potential benefit in improving cognitive endpoints. Our development plan for CVL-231 is informed by thorough in vitro and in vivo PK and pharmacodynamic characterization as well as data from competitive muscarinic compounds. CVL-231 has been evaluated in 17 healthy volunteers in a Phase 1 single ascending dose, or SAD, trial, which showed that it was generally well tolerated with no serious adverse events or subject discontinuations.

We are developing CVL-865 for the treatment of both epilepsy and anxiety. CVL-865 was rationally designed as an orally-bioavailable, twice-daily PAM that selectively targets the alpha-2/3/5 subunits of the GABAA receptor. We believe that by having minimal receptor activation via the alpha-1 subunit-containing GABAA receptor, CVL-865 can minimize the negative side effects of sedation and potential for loss of efficacy with repeated use, or tolerance, and addiction seen with traditional non-selective GABAA receptor modulators, such as benzodiazepines, or BZDs. To our knowledge, CVL-865 is the only alpha-2/3/5 selective GABAA receptor PAM being evaluated in clinical trials for epilepsy. We initiated a Phase 2 proof-of-concept trial in drug-resistant focal onset seizures in epilepsy, or focal onset epilepsy, in the second half of 2020, with data expected in the second half of 2022. The focal onset epilepsy population is the largest subpopulation of epilepsy patients and is often studied to establish proof-of-concept in the development of an anti-epileptic drug, or AED. We also plan to initiate a Phase 1 proof-of-principle trial for acute anxiety in healthy volunteers in the second half of 2020, with data expected in the second half of 2021.

CVL-865 has been evaluated in 289 subjects across nine clinical trials to date. In a Phase 2, double-blind, crossover trial in photoepilepsy patients comparing CVL-865 to lorazepam, a commonly prescribed BZD, and to placebo, CVL-865 demonstrated anti-epileptic activity similar to lorazepam. In this trial, six out of seven photosensitive patients taking CVL-865 achieved complete suppression of epileptiform activity evoked by strobe lights. In a Phase 1 trial comparing CVL-865 to lorazepam, healthy volunteers were assessed using the NeuroCart CNS test battery to characterize the pharmacodynamics of CVL-865. Compared to lorazepam, CVL-865 demonstrated a greater reduction in saccadic peak velocity, a biomarker indicating engagement of alpha-2/3 subunit-containing GABAA receptors, while having reduced effects on motor coordination and cognition. In a Phase 1 MAD trial in healthy volunteers, CVL-865 showed no dose-related somnolence after the initial titration period, even at dose levels consistent with receptor occupancy of approximately 80%. Taken together, we believe these data suggest that CVL-865 may have the potential for anti-epileptic activity comparable to currently available BZDs, with reduced sedation, tolerance and withdrawal liabilities that, unlike BZDs, can be dosed chronically.

We are developing our most advanced product candidate, tavapadon, for the treatment of both early- and late- stage Parkinson’s, a neurodegenerative disorder characterized by the death of dopamine-producing neurons in the brain. Tavapadon was rationally designed as an orally-bioavailable, once-daily partial agonist that selectively targets dopamine D1/D5 receptor subtypes with the goal of balancing meaningful motor control activity with a favorable tolerability profile. To our knowledge, tavapadon is the only D1/D5 partial agonist currently in clinical development and the first oral D1/D5 agonist to have achieved sustained motor control improvement in Phase 2 trials of Parkinson’s. We initiated a registration-directed Phase 3 program beginning in January 2020, which will include two trials in early-stage Parkinson’s, one trial in late-stage Parkinson’s and an open-label safety extension trial. In response to the COVID-19 global pandemic, we paused patient screening and enrollment of our Parkinson’s trials and remain particularly vigilant about safety given the elderly nature of this population. We resumed the program and restarted patient screening in the second half of 2020. Assuming no further delays in this program, we expect data from our Phase 3 program to be available beginning in the first half of 2023.



 

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As part of an extensive clinical program, tavapadon has been evaluated in 272 subjects across nine clinical trials to date, including four Phase 1 trials, two Phase 1b trials and three Phase 2 trials. In a Phase 2 trial in early- stage Parkinson’s, tavapadon demonstrated a statistically significant and clinically meaningful difference from placebo of -4.8 points on the MDS-UPDRS Part III motor score at week 15 of the treatment period. Separation from placebo was observed as early as week three while still in the titration phase. Statistical significance (p=0.0407) for this endpoint was achieved despite the trial being terminated early when only 65% of the planned trial population had been enrolled and even though only 42% of the patients who reached the maintenance period had received the top dose of 15 mg. A Phase 2 trial in late-stage Parkinson’s was terminated by Pfizer based on the results of an interim analysis, which determined that the probability of meeting the efficacy criterion for the primary endpoint of improvement in “off” time reduction compared to placebo at week 10 was lower than a pre-specified efficacy hurdle. As explained in more detail herein, we believe the pre-specified efficacy hurdle was a significant threshold to overcome given the limited duration of the trial. Despite the early termination of this trial, tavapadon showed a 1.0 hour improvement versus placebo in “on” time without troublesome dyskinesias at week 10 with a sustained effect observed through week 15, which, while not statistically significant, we and our clinical advisors believe is clinically meaningful. Across the nine clinical trials conducted to date, tavapadon has consistently demonstrated what we believe to be a favorable tolerability profile as well as a pharmacokinetic, or PK, profile with a 24-hour terminal half-life.

Our clinical-stage pipeline includes two additional orally-bioavailable small molecules:

 

   

CVL-871 is a selective dopamine D1/D5 partial agonist specifically designed to achieve a modest level of partial agonism, which we believe may be useful in modulating the complex neural networks that govern cognition, motivation and behavior. We plan to initiate a Phase 2a trial for CVL-871 for dementia-related apathy in the first half of 2021, with data expected in the second half of 2022.

 

   

CVL-936 is a selective dopamine D3-preferring antagonist that we are developing for the treatment of substance use disorder, or SUD. We initiated a Phase 1 SAD trial in January 2020. After completing dosing of Cohort 1, we concluded this study early due to the COVID-19 global pandemic and the receipt of sufficient clinical data for the intended purposes of this trial. Upon obtaining non-clinical safety plan data that are designed to enable single and multiple dosing in human participants, we plan to begin a MAD trial in 2021, with data expected in the second half of 2022.

We believe that all five of our clinical-stage product candidates have target product profiles that may enable them to become backbone therapies in their respective lead indications, either replacing standards of care as monotherapies or enhancing treatment regimens as adjunct to existing therapies. Results from the clinical trials mentioned above will guide the potential development of our product candidates in additional indications with similar neurocircuitry deficits.

In addition to our clinical-stage pipeline, we plan to advance the development of our preclinical portfolio across multiple neuroscience indications. We are deploying the latest technologies, such as artificial intelligence and DNA-encoded chemical libraries, to efficiently identify new therapeutic molecules, including those with disease-modifying potential. We believe that our approach will enable us to create a leading neuroscience drug discovery and development platform to transform the lives of patients living with neuroscience diseases.



 

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Our Pipeline

The following table summarizes our current portfolio of product candidates. This table does not include two additional preclinical programs with disease-modifying potential that have not yet been disclosed.

 

LOGO

Our Approach

Fundamental to our approach is understanding how deficits in neurocircuitry drive the development of symptoms in neuroscience diseases. Achieving optimal therapeutic benefit and minimizing unintended side effects in neuroscience diseases requires tuning the specificity and dynamic range of neural networks. Recent advancements in chemistry, genomics and proteomics have provided tools to enable targeted receptor selectivity with specificity to neural networks that underlie disease symptomatology. Fine-tuning the dynamic range of selective neurotransmitter neurocircuitry requires carefully-designed receptor pharmacology, such as allosteric modulation or partial agonism, to normalize neural network function without over-activation or over-suppression.

Below are the key pillars of our approach:

 

   

Mechanism of action—targeted receptor selectivity: A single neurotransmitter can act on multiple receptor subtypes that are expressed differentially among neuron types and neural networks within the brain and nervous system. We believe the ability to selectively target neurotransmitter receptor subtypes may provide an important opportunity to achieve maximum activity within specific neural



 

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networks while minimizing unintended interactions in other areas of the nervous system that are targeted by non-selective compounds and result in unwanted side effects.

 

   

Receptor pharmacology: Neural networks in the brain operate within a dynamic range, and our understanding of disease state mechanics allows us to design molecular attributes that are intended to normalize this range for each disease. For example, classical full receptor agonism or antagonism may fully activate or inactivate neural circuits and can compensate for disease but also limit normal functional dynamic range. However, partial agonism or allosteric modulation can correct or fine-tune the range of network signaling without fully blocking or overexciting normal activity. Each disease state represents a unique abnormality in neural network activity requiring a nuanced pharmacological approach. In addition, molecules require specific physical and metabolic properties to become a viable commercial product. Incorporating all of these characteristics into a single molecule can be extremely challenging. The evidence to date for our product candidates suggests that they may balance targeted selectivity with optimal receptor pharmacology. We believe this underscores the differentiation and therapeutic potential of our pipeline.

 

   

Robust clinical and preclinical evaluation: Our clinical-stage product candidates have undergone robust clinical and preclinical testing to provide support for continued advancement through the clinical development process. In these early clinical trials and preclinical studies, we have generally observed PK, bioavailability, brain penetration and reduced off-target activity that demonstrate the potential for reducing tolerability issues. In addition, data from these trials support dose selection generally informed by PET receptor occupancy and clinical biomarkers. Based on extensive characterization and research, our product candidates were designed to reproduce validated biological activity while addressing the limitations of prior known compounds. We believe the wealth of clinical and preclinical data generated to date strongly positions our product candidates for clinical advancement.

Our Strategy

We are a neurocircuitry company that seeks to transform the lives of patients with neuroscience diseases by leveraging our deep understanding of neurocircuitry, chemistry and receptor pharmacology. Our strategy is to:

 

   

Establish our position as a leader in neuroscience drug discovery and development through the advancement of a diverse and innovative pipeline. We leverage our differentiated understanding of neurocircuitry as well as our innovative clinical trial design and execution to develop our assets across multiple indications. In addition, we are investing in future areas of neuroscience research, including the discovery and development of compounds with disease-modifying potential.

 

   

Rapidly develop our five clinical-stage assets, with at least eight clinical trials either underway or expected to start by the end of 2021. We are currently conducting a Phase 1b MAD and PK/PD trial of CVL-231 in patients with schizophrenia, with data expected in the second half of 2021. We also commenced a Phase 2 proof-of-concept trial of CVL-865 in focal onset epilepsy and plan to commence a Phase 1 proof-of-principle trial in acute anxiety in healthy volunteer in the second half of 2020. In addition, in January 2020, we initiated our registration-directed Phase 3 program for tavapadon. This program will include three Phase 3 trials in both early- and late-stage Parkinson’s that will be conducted in parallel as well as an open-label extension trial. If approved, we believe that tavapadon would have the potential to become a cornerstone therapy for Parkinson’s patients across the disease spectrum. Furthermore, we plan to initiate a Phase 2a trial of CVL-871 for dementia-related apathy in the first half of 2021, with data expected in the second half of 2022. Finally, we are developing CVL-936, which is currently in Phase 1 for the treatment of SUD.

 

   

Advance our preclinical portfolio across multiple neuroscience indications. Our preclinical pipeline includes: (1) CVL-354, a selective kappa opioid receptor, or KOR, antagonist that we are advancing for



 

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the treatment of SUD; (2) our PDE4B inhibitor program that we are advancing as an antipsychotic agent; (3) our M4 full/partial agonist for potential use in PD-LID; and (4) our LRRK2 inhibitor that has the potential to address disease progression in Parkinson’s. We are also pursuing a number of other undisclosed targets, including those with disease-modifying potential. These programs include ones initiated by Pfizer as well as others developed internally through the application of new technology platforms, such as artificial intelligence and DNA-encoded chemical libraries.

 

   

Efficiently allocate capital to maximize the impact of our assets. We seek to efficiently allocate capital through step-wise value creation: driving speed to proof-of-principle, speed to proof-of-concept and speed to market. For example, our early-stage clinical trials are designed to elucidate the potential of our compounds and inform future clinical trials, thereby strengthening our probability of success and our efficiency in bringing our therapies to patients. We aim to be resource- and capital-efficient in the development of our product candidates by selectively accessing complementary expertise and infrastructure through strategic partnerships or other collaborations. We are also building a leading neuroscience team that we believe has a differential ability to identify high-potential assets for acquisition or in-licensing and unlock their full value. We plan to opportunistically pursue such assets from time to time and strategically expand our portfolio.

 

   

Opportunistically match sources and uses of capital. Our broad portfolio both requires and provides a basis for diverse financing options. We will seek to maximize growth opportunities, which may include raising additional capital through a combination of private or public equity offerings, debt financings, collaborations, strategic alliances, marketing, distribution or licensing arrangements with third parties or through other sources of financing. By matching sources and uses of capital, we can maximize our value creation opportunities while mitigating operational risk through partnerships.

 

   

Maximize the commercial potential of our product candidates and bring new therapies to underserved patient populations. Our development and commercialization strategy will be driven by our understanding of existing treatment paradigms along with patient, physician and payor needs. We expect to build a focused and efficient medical affairs and commercial organization to maximize the commercial potential of our portfolio. Our current plan is to commercialize our product candidates, if approved, in the United States and international markets, either alone or in collaboration with others.

Our Team and Corporate History

Since our founding in 2018, we have assembled a seasoned management team with expertise in neuroscience research, development, regulatory affairs, medical affairs, operations, manufacturing and commercialization. Our team includes industry veterans who have collectively driven over 20 drug approvals, with prior experience at companies such as Biogen, Bristol-Myers Squibb, Merck, NPS Pharmaceuticals, Onyx Pharmaceuticals, Otsuka Pharmaceutical, Sangamo Therapeutics, Vertex Pharmaceuticals and Yumanity Therapeutics. We have an experienced research and development team focused on utilizing our differentiated understanding of the complex neurocircuitry, receptor pharmacology and genetics that underlie neuroscience diseases. This allows us to develop small molecules with target receptor selectivity and indication-appropriate pharmacology, which we believe are key to enhancing activity and improving tolerability in the treatment of these diseases. We believe that the distinctive combination of our management team and our existing pipeline has the potential to bring to patients the next generation of transformative neuroscience therapies.

In August 2018, we entered into the Pfizer License Agreement, pursuant to which we in-licensed our current pipeline from Pfizer. Under the terms of the Pfizer License Agreement, we are required to pay Pfizer tiered royalties on aggregate net sales of in-licensed products as well as certain regulatory and commercial milestone payments. See “—Pfizer License Agreement.” Concurrent with the in-license of our pipeline from Pfizer, Bain Investor, an affiliate of Bain Capital, committed to ensuring that we receive aggregate equity cash proceeds equal to at least $350.0 million. To date, we have received investments totaling $200.0 million from Bain Investor.



 

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Pfizer License Agreement

In August 2018, we entered into the Pfizer License Agreement pursuant to which we were granted an exclusive, sublicensable, worldwide license under certain Pfizer patent rights, and a non-exclusive, sublicensable, worldwide license under certain Pfizer know-how, to develop, manufacture and commercialize certain compounds and products, which currently constitute the entirety of our asset portfolio, in the field of treatment, prevention, diagnosis, control and maintenance of all diseases and disorders in humans, subject to the terms and conditions of the Pfizer License Agreement. The license excludes the field of treatment, prevention, diagnosis, control and maintenance of inflammatory bowel diseases and disorders in humans by compounds or products exerting a therapeutic effect on the LRRK2 target, which is retained by Pfizer. Under the terms of the Pfizer License Agreement, Pfizer is granted a non-exclusive, sublicensable, royalty-free, worldwide license under intellectual property we develop during the term of the agreement for all purposes in the LRRK2 field retained by Pfizer. Additionally, Pfizer has an exclusive right of first negotiation in the event that we seek to enter into any significant transaction with a third party with respect to a product either globally or in certain designated countries. Significant transactions include exclusive licenses, assignments, sales, exclusive co-promotion arrangements, and other transfers of all commercial rights to a product globally or in certain designated countries, as well as exclusive distribution agreements globally or in certain designated countries.

Under the Pfizer License Agreement, we are solely responsible for the development, manufacture, regulatory approval and commercialization of compounds and products in the field. We are required to use commercially reasonable efforts to develop and seek regulatory approval for a product that contains or incorporates one of certain scheduled compounds to exert a therapeutic effect on certain targets, in each of the following countries: United Kingdom, Germany, France, Italy, Spain, China, Japan and the United States, each a major market country. We are also required to use commercially reasonable efforts to commercialize each such product, if approved, in each major market country in which regulatory approval for such product has been obtained. The Pfizer License Agreement requires Pfizer to transfer certain know-how and data, regulatory filings and materials, inventory, and other materials, records and documents, and provide certain other transitional support and assistance which has been and is expected to be immaterial, to us to facilitate our development, manufacture and commercialization of compounds and products in the field.

As partial consideration for the licensed assets, we issued Pfizer 3,833,333.33 shares of our Series A-2 Preferred Stock with an estimated fair value of $100.4 million, or $26.20 per share. We also reimbursed Pfizer for $11.0 million of direct expenses related to the Pfizer License Agreement, bringing the total initial consideration to $111.4 million.

Under the terms of the Pfizer License Agreement, we are also required to make regulatory approval milestone payments to Pfizer, ranging from $7.5 million to $40.0 million on a compound-by-compound basis, upon the first regulatory approval in the United States for the first product containing or comprised of a given compound, with the amount of the payments determined by which designated group the compound falls into and with each such group generally characterized by the compounds’ stage of development. Each such regulatory approval milestone is payable only once per compound. If all of our product candidates included in the table in the section entitled “—Our Pipeline” are approved in the United States, the total aggregate amount of such regulatory approval milestones payable to Pfizer would be approximately $220.0 million. No regulatory approval milestone payments were made or became due in the period from Inception through March 31, 2020.

In addition, we are required to pay Pfizer commercial milestone payments up to an aggregate of $170.0 million per product, when aggregate net sales of products under the Pfizer License Agreement in a calendar year first reach various thresholds ranging from $500.0 million to $2.0 billion. Each commercial milestone payment is payable only once upon first achievement of the applicable commercial milestone. If all of our product candidates included in the table in the section entitled “—Our Pipeline” achieves all of the



 

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commercial milestones, the total aggregate amount of such commercial milestones payable to Pfizer would total approximately $1.7 billion. No Pfizer commercial milestone payments were made or became due in the period from Inception to through March 31, 2020.

We are also required to pay Pfizer tiered royalties on the aggregate net sales during each calendar year, determined on a product-by-product basis, with respect to products under the Pfizer License Agreement, at percentages ranging from the low-single to mid-teens, with the royalty rate determined by which designated group the applicable compound for such product falls into and with each such group generally characterized by the compounds’ stage of development, and subject to certain royalty deductions for the expiration of patent, regulatory and data exclusivity, generic competition and third-party royalty payments as set forth in the Pfizer License Agreement. The royalty term expires, on a product-by-product and country-by-country basis, on the later of (1) expiration of all regulatory or data exclusivity for such product in such country, (2) the date upon which the manufacture, use, sale, offer for sale or importation of such product in such country would no longer infringe, but for the license granted in the Pfizer License Agreement, a valid claim of the licensed patents and (3) 12 years following the first commercial sale of such product in such country. No royalty payments were made or became due in the period from Inception to through March 31, 2020.

Pfizer can terminate the Pfizer License Agreement in its entirety upon our material breach, subject to specified notice and cure provisions. However, if such material breach is with respect to one or more, but not all, products, targets or countries, Pfizer’s right to terminate is only with respect to such products, targets or countries. Either party may terminate the Pfizer License Agreement in its entirety upon event of a bankruptcy, insolvency or other similar proceeding of the other party or a force majeure event that prohibits the other party from performing for a period of time. Absent early termination, the term of the Pfizer License Agreement will continue on a country-by-country basis and product-by-product basis, until the expiration of the royalty term for the country and the product. Upon Pfizer’s termination of the Pfizer License Agreement for our material breach or either party’s termination for bankruptcy, insolvency or other similar proceeding or force majeure, we would grant Pfizer an exclusive, sublicensable, royalty-free, worldwide, perpetual license under certain intellectual property we develop during the term of the Pfizer License Agreement. In addition, we would negotiate a transition plan with Pfizer that would address, among other things, the transfer of know-how and data, regulatory approvals and filings and materials, inventory and other materials, records and documents, and the provision of certain other transitional support and assistance for the terminated products, targets or countries.

The Parties to the Business Combination

ARYA

ARYA is a blank check company incorporated on February 20, 2020 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. ARYA has neither engaged in any operations nor generated any revenue to date. Based on ARYA’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

On June 9, 2020, ARYA consummated an initial public offering of 14,950,000 units at an offering price of $10.00 per unit, and a private placement with Sponsor of 499,000 private placement units at an offering price of $10.00 per unit. Each unit sold in the initial public offering and private placement consists of one Class A ordinary share and one-third of one redeemable warrant.

Following the closing of ARYA’s initial public offering, an amount equal to $149,500,000 of the net proceeds from its initial public offering and the sale of the private placement units was placed in the trust account. The trust account may be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under



 

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Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government obligations. As of September 30, 2020, funds in the trust account totaled approximately $149,572,055 and were held in U.S. treasury securities. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (i) the completion of ARYA’s initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Existing Governing Documents to modify the substance and timing of our obligation to redeem 100% of the public shares if ARYA does not complete a business combination by June 9, 2022, or (iii) the redemption of all of the public shares if ARYA is unable to complete a business combination by June 9, 2022 (unless such date is extended in accordance with the Existing Governing Documents), subject to applicable law.

ARYA’s units, public shares and public warrants are currently listed on Nasdaq under the symbols “ARYBU,” “ARYB” and “ARYBW,” respectively.

ARYA’s principal executive office is located at 51 Astor Place, 10th Floor, New York, NY 10003, and its telephone number is (212) 284-2300. ARYA’s corporate website address is https://www.perceptivelife.com/arya2. ARYA’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus.

Cerevel

Cerevel is a Delaware corporation.

Cerevel’s principal executive office is located at 131 Dartmouth Street, Suite 502, Boston, MA 02116, and its telephone number is (844) 304-2048. Cerevel’s corporate website address is http://www.cerevel.com. Cerevel’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus.

Cassidy Merger Sub

Cassidy Merger Sub is a Delaware corporation and wholly-owned subsidiary of ARYA formed for the purpose of effecting the Business Combination. Cassidy Merger Sub owns no material assets and does not operate any business.

Cassidy Merger Sub’s principal executive office is located at 51 Astor Place, 10th Floor, New York, NY 10003, and its telephone number is (646) 205-5300.

Proposals to be Put to the Shareholders of ARYA at the Extraordinary General Meeting

The following is a summary of the proposals to be put to the extraordinary general meeting of ARYA and certain transactions contemplated by the Business Combination Agreement. Each of the proposals below, except the Adjournment Proposal, is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The transactions contemplated by the Business Combination Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting.

As discussed in this proxy statement/prospectus, ARYA is asking its shareholders to approve by ordinary resolution the Business Combination Agreement, pursuant to which, among other things, on the date of Closing, promptly following the consummation of the Domestication, Cassidy Merger Sub will merge with and into Cerevel, with Cerevel as the surviving company in the Merger and, after giving effect to such Merger, Cerevel shall be a wholly-owned subsidiary of ARYA. In accordance with the terms and subject to the conditions of the



 

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Business Combination Agreement, at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (i).

After consideration of the factors identified and discussed in the section entitled “Business Combination Proposal—The ARYA Board’s Reasons for the Business Combination,” the ARYA Board concluded that the Business Combination met all of the requirements disclosed in the prospectus for ARYA’s initial public offering, including that the businesses of Cerevel had a fair market value of at least 80% of the balance of the funds in the trust account at the time of execution of the Business Combination Agreement. For more information about the transactions contemplated by the Business Combination Agreement, see “Business Combination Proposal.”

Consideration to Cerevel Equityholders in the Business Combination

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common Stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (i).

For further details, see “Business Combination Proposal—Business Combination Consideration.”

Conditions to Closing of the Business Combination

The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Business Combination Agreement having expired or been terminated; (iii) ARYA having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing; (iv) the Aggregate Transaction Proceeds Condition; (v) the approval by Nasdaq of our initial listing application in connection with the Business Combination; (vi) there being immediately following the Effective Time, to the knowledge of ARYA, no single beneficial owner of ordinary shares (other than the Bain Investor, Pfizer or the Perceptive Shareholders) of greater than 9.9% and no three beneficial owners of shares of ARYA’s ordinary shares (other than the Bain Investor, Pfizer and the Perceptive Shareholders) of greater than 25%; and (vii) the consummation of the Domestication. Therefore, unless these conditions are waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated. For further details, see “Business Combination Proposal—Conditions to Closing of the Business Combination.”

Domestication Proposal

As discussed in this proxy statement/prospectus, ARYA will ask its shareholders to approve by special resolution the Domestication Proposal. As a condition to closing the Business Combination pursuant to the terms of the Business Combination Agreement, the board of directors of ARYA has unanimously approved the Domestication Proposal. The Domestication Proposal, if approved, will authorize a change of ARYA’s



 

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jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while ARYA is currently incorporated as an exempted company under the Cayman Islands Companies Law, upon Domestication, New Cerevel will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as the Existing Governing Documents and the Proposed Governing Documents. The approval of each of the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D and the Governing Documents Proposal E requires a special resolution under Cayman Islands law, being the affirmative vote of holders at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter. Accordingly, we encourage shareholders to carefully consult the information set out below under “Comparison of Corporate Governance and Shareholder Rights.”

For further details, see “Domestication Proposal” and “Governing Documents Proposals.”

Governing Documents Proposals

ARYA will ask its shareholders to approve by special resolution (unless otherwise stated) five (5) separate Governing Documents Proposals in connection with the replacement of the Existing Governing Documents, under Cayman Islands law, with the Proposed Governing Documents, under the DGCL. The ARYA Board has unanimously approved each of the Governing Documents Proposals and believes such proposals are necessary to adequately address the needs of New Cerevel after the Business Combination. Approval of each of the Governing Documents Proposals is a condition to the consummation of the Business Combination. A brief summary of each of the Governing Documents Proposals is set forth below. These summaries are qualified in their entirety by reference to the complete text of the Proposed Governing Documents.

 

   

Governing Documents Proposal A—to authorize by way of ordinary resolution the change in the authorized share capital of ARYA from US$50,000 divided into (i) 479,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share and 1,000,000 preference shares, par value $0.0001 to (ii) 500,000,000 shares of New Cerevel Common Stock and 10,000,000 shares of New Cerevel Preferred Stock.

 

   

Governing Documents Proposal B—to authorize the New Cerevel Board to issue any or all shares of New Cerevel Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New Cerevel Board and as may be permitted by the DGCL.

 

   

Governing Documents Proposal C—to provide that certain provisions of the certificate of incorporation of New Cerevel are subject to the Amended and Restated Registration and Shareholder Rights Agreement.

 

   

Governing Documents Proposal D—to authorize the removal of the ability of New Cerevel stockholders to take action by written consent in lieu of a meeting.

 

   

Governing Documents Proposal E—to amend and restate the Existing Governing Documents and authorize all other changes necessary or, as mutually agreed in good faith by ARYA and Cerevel, desirable in connection with the replacement of Existing Governing Documents with the Proposed Governing Documents as part of the Domestication, including (i) changing the post-Business Combination corporate name from “ARYA Sciences Acquisition Corp II” to “Cerevel Therapeutics Holdings, Inc.” (which is expected to occur after the consummation Domestication in connection with the Business Combination), (ii) making New Cerevel’s corporate existence perpetual, (iii) adopting Delaware as the exclusive forum for certain stockholder litigation and the United States District Court for the District of Massachusetts as the exclusive forum for litigation arising out of the Securities Act, (iv) electing to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers



 

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by interested stockholders and (v) removing certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which the AYRA Board believes is necessary to adequately address the needs of New Cerevel after the Business Combination.

The Proposed Governing Documents differ in certain material respects from the Existing Governing Documents, and we encourage shareholders to carefully consult the information set out in the section entitled “Governing Documents Proposals” and the full text of the Proposed Governing Documents of New Cerevel, attached hereto as Annexes C and D.

Nasdaq Proposal

Our shareholders are also being asked to approve, by ordinary resolution, the Nasdaq Proposal. Our units, public shares and public warrants are listed on Nasdaq and, as such, we are seeking shareholder approval for issuance of New Cerevel Common Stock in connection with the Business Combination and the PIPE Financing pursuant to Nasdaq Listing Rule 5635.

For additional information, see “Nasdaq Proposal.”

Incentive Award Plan Proposal

Our shareholders are also being asked to approve, by ordinary resolution, the Incentive Award Plan Proposal. Pursuant to the Incentive Equity Plan, a number of shares of New Cerevel Common Stock equal to 24,050,679 shares of New Cerevel Common Stock that are outstanding on an as-converted and as-redeemed basis as of the date immediately following the consummation of the Business Combination will be reserved for issuance under the Incentive Award Plan. The Incentive Equity Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2021, by 4.0% of the outstanding number of shares of New Cerevel Common Stock on the immediately preceding December 31, or such lesser amount as determined by the Board of New Cerevel. For additional information, see “Incentive Award Plan Proposal.” The full text of the Incentive Award Plan is attached hereto as Annex J.

Employee Stock Purchase Plan Proposal

Our shareholders are also being asked to approve, by ordinary resolution, the Employee Stock Purchase Plan Proposal. A total of 1,655,924 shares of New Cerevel Common Stock will be reserved for issuance under the ESPP. Based upon a price per share of $10.00, the maximum aggregate market value of the New Cerevel Common Stock that could potentially be issued under the ESPP at Closing is $16,559,240. The ESPP provides that the number of shares reserved and available for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2021, by 1.0% of the outstanding number of shares of New Cerevel Common Stock on the immediately preceding December 31, or such lesser amount as determined by the New Cerevel Board. For additional information, see “Employee Stock Purchase Plan Proposal.” The full text of the ESPP is attached hereto as Annex K.

Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize ARYA to consummate the Business Combination, the ARYA Board may submit a proposal to adjourn the extraordinary general meeting to a later date or dates to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates. For additional information, see “Adjournment Proposal.”



 

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Each of the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals, the Nasdaq Proposal and the Incentive Award Plan Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Governing Documents Proposals that are not Required Governing Documents Proposals and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on any other proposal.

The ARYA Board’s Reasons for the Business Combination

ARYA was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The ARYA Board sought to do this by utilizing the networks and industry experience of both the Sponsor and the ARYA Board and management to identify, acquire and operate one or more businesses. The members of the ARYA Board and management have extensive transactional experience, particularly in the healthcare and life sciences industries.

In particular, the ARYA Board considered the following positive factors, although not weighted or in any order of significance, in deciding to approve the Business Combination Proposal:

 

  A.

leadership in neuroscience drug discovery and development through the advancement of a diverse and innovative product pipeline;

 

  B.

rapid advancement of a proprietary product pipeline through clinical development;

 

  C.

advancement of a preclinical portfolio through new technology platforms;

 

  D.

efficient capital allocation through step-wise value creation and strategic partnerships;

 

  E.

maximized growth opportunities through the use of diverse financing options and opportunities;

 

  F.

development of the commercial potential of product candidates, if approved;

 

  G.

experienced management team;

 

  H.

strong commitment of top tier U.S. healthcare investors and existing Cerevel shareholders; and

 

  I.

financial analysis conducted by ARYA’s management team.

The ARYA Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

  A.

the risk that the potential benefits of the Business Combination may not be fully achieved;

 

  B.

the risks and costs to ARYA if the Business Combination is not completed;

 

  C.

the fact that the Business Combination Agreement includes an exclusivity provision that prohibits ARYA from soliciting other business combination proposals;

 

  D.

the risk that ARYA’s shareholders may fail to provide the respective votes necessary to effect the Business Combination;

 

  E.

the completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within ARYA’s control;

 

  F.

the nomination rights of certain investors;

 

  G.

the limited review undertaken by the ARYA Board;

 

  H.

potential litigation challenging the Business Combination;



 

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  I.

the fees and expenses associated with completing the Business Combination; and

 

  J.

various other risks associated with the Business Combination, the business of ARYA and the business of Cerevel described under the section entitled “Risk Factors.”

In addition to considering the factors described above, the ARYA Board also considered that certain of the officers and directors of ARYA may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of ARYA’s shareholders. ARYA’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and approving, as members of the ARYA Board, the Business Combination Agreement and the transactions contemplated therein, including the Business Combination.

The ARYA Board concluded that the potential benefits that it expected ARYA and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the ARYA Board determined that the Business Combination Agreement, the Business Combination and the Merger, were advisable, fair to, and in the best interests of, ARYA and its shareholders.

For more information about the ARYA Board’s decision-making process concerning the Business Combination, please see the section entitled “The Business Combination Proposal—the ARYA Board’s Reasons for the Business Combination.”

Related Agreements

This section describes certain additional agreements entered into or to be entered into in connection with the Business Combination Agreement. For additional information, see “Business Combination Proposal—Related Agreements.”

PIPE Financing

ARYA entered into Subscription Agreements with the PIPE Investors to consummate the PIPE Financing, pursuant to which the PIPE Investors have agreed to subscribe for and purchase, and ARYA has agreed to issue and sell to the PIPE Investors, an aggregate of 32,000,000 shares of New Cerevel Common Stock at a price of $10.00 per share, for aggregate gross proceeds of $320,000,000. The Perceptive PIPE Investor will fund $30,000,000 in the PIPE Financing, Pfizer will fund $12,000,000 in the PIPE Financing and the Bain Investor will fund $100,000,000 in the PIPE Financing. Pursuant to the Subscription Agreement entered into with the Bain Investor, the Bain Investor has pre-funded $25,000,000 of its commitment, and may further pre-fund a portion of its remaining PIPE Financing commitment, on the terms and subject to the conditions set forth in such Subscription Agreement and the Business Combination Agreement, which pre-funding will reduce the Bain Investor’s commitment required to be funded under the Subscription Agreement on a dollar-for-dollar basis. The shares of New Cerevel Common Stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. ARYA will grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the substantially concurrent closing of the Business Combination. For additional information, see “Business Combination Proposal—Related Agreements—PIPE Financing.”

Amended and Restated Registration and Shareholder Rights Agreement

At the Closing, ARYA, the initial shareholders, the Perceptive PIPE Investor, the Bain Investor, and Pfizer will enter into an Amended and Restated Registration and Shareholder Rights Agreement (the “Amended and



 

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Restated Shareholder Rights Agreement”), pursuant to which, among other things, the Perceptive Shareholders, the Bain Investor and Pfizer (a) will agree not to effect any sale or distribution of any equity securities of New Cerevel held by any of them during the lock-up period described therein, (b) will be granted certain customary registration rights and will be granted certain preemptive rights with respect to their respective shares of New Cerevel Common Stock and (c) the Bain Investor and Pfizer agree to cast their votes such that the New Cerevel Board is constituted as set forth in the Registration and Shareholder Rights Agreement. For additional information, see “Business Combination Proposal—Related Agreements—Registration and Shareholder Rights Agreement.”

Cerevel Shareholder Transaction Support Agreements

Pursuant to the Business Combination Agreement, each of Pfizer, the Bain Investor and the other stockholders of Cerevel entered into a Transaction Support Agreement (collectively, the “Cerevel Shareholder Transaction Support Agreements”) with ARYA, pursuant to which the Cerevel Shareholders have agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the transactions contemplated thereby and (ii) be bound by certain other covenants and agreements related to the Business Combination. For additional information, see “Business Combination Proposal—Related Agreements—Transaction Support Agreements.”

ARYA Shareholder Transaction Support Agreements

Concurrently with the execution of the Subscription Agreements, Cerevel and certain holders of ARYA’s Class A ordinary shares participating in the PIPE Financing entered into shareholder support agreements (the “ARYA Shareholder Transaction Support Agreements”) pursuant to which each such holder agreed (i) to vote at any meeting of the shareholders of ARYA all of its ordinary shares held of record or thereafter acquired in favor of the Business Combination and the other Transaction Proposals (as defined in the Business Combination Agreement), (ii) not to redeem any such securities in connection with the Business Combination, and (iii) to be bound by certain transfer restrictions with respect to such securities, unless (and only for the duration) that the trading price of ARYA’s Class A ordinary shares on the Nasdaq Capital Market exceeds $15.00 per share. For additional information, see “Business Combination Proposal—Related Agreements—Transaction Support Agreements.”

Sponsor Letter Agreement

Pursuant to the Business Combination Agreement, ARYA, Sponsor, Jake Bauer, Chad Robins, Todd Wider and Cerevel entered into the Sponsor Letter Agreement (the “Sponsor Letter Agreement”), pursuant to which Sponsor and each of Jake Bauer, Chad Robins and Todd Wider has agreed to, among other things, vote in favor of the Business Combination Agreement and the transactions contemplated thereby (including the Merger).

Ownership of New Cerevel

As of the date of this proxy statement/prospectus, there are 19,186,500 ordinary shares issued and outstanding, which includes an aggregate of 3,737,500 Class B ordinary shares. As of the date of this proxy statement/prospectus, there is outstanding an aggregate of 5,149,666 warrants, comprised of 166,333 private placement warrants held by Sponsor and 4,983,333 public warrants. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of New Cerevel Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming that none of ARYA’s outstanding public shares are redeemed in connection with the Business Combination), ARYA’s fully-diluted share capital would be 24,336,166 ordinary shares.



 

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The following table illustrates varying ownership levels in New Cerevel Common Stock immediately following the consummation of the Business Combination based on the varying levels of redemptions by the public shareholders and the following additional assumptions: (i) 76,263,673 shares of New Cerevel Common Stock are issued to the holders of shares of common stock (including the holders of vested restricted stock units that will settle prior to completion of the Business Combination) and preferred stock of Cerevel at Closing, which would be the number of shares of New Cerevel Common Stock issued to these holders if Closing were to occur on September 30, 2020; (ii) 32,000,000 shares of New Cerevel Common Stock are issued in the PIPE Financing or deemed issued in connection with any pre-funding by Bain Investor pursuant to its Subscription Agreement; (iii) no public warrants or private placement warrants to purchase New Cerevel Common Stock that will be outstanding immediately following Closing have been exercised; and (iv) no vested and unvested options to purchase New Cerevel Common Stock that will be held by equityholders of Cerevel immediately following the Closing have been exercised. If the actual facts are different than these assumptions, the ownership percentages in New Cerevel will be different.

 

     Share Ownership in New
Cerevel(1)
 
     No redemptions     Maximum
redemptions(2)
 
     Percentage of
Outstanding
Shares
    Percentage of
Outstanding
Shares
 

Bain Investor(3)

     47.08     53.34

Pfizer(4)

     21.49     24.35

ARYA public shareholders(5)

     11.73     0.00

Perceptive PIPE Investor and our initial shareholders(6)(7)

     5.68     6.43

Other PIPE Investors(8)

     13.97     15.82

Other Cerevel Stockholders(9)

     0.06     0.06

 

(1)

The number of shares of New Cerevel Common Stock issued to he holders of shares of common stock and preferred stock of Cerevel at Closing will fluctuate based on the number of shares underlying vested Cerevel options (and the exercise price of such options) and restricted stock units at Closing, but will in no event exceed 78,000,000 shares of New Cerevel Common Stock. Vested Cerevel options and restricted stock units are taken into account for purposes of allocating the implied $780,000,000 equity value of Cerevel among the holders of shares and vested equity awards of Cerevel with the value allocable to such vested options being determined based on the treasury stock method.

(2)

Assumes that, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, all of ARYA’s outstanding public shares are redeemed in connection with the Business Combination.

(3)

Includes 10,000,000 shares acquired in the PIPE Financing or deemed acquired in connection with any pre-funding by Bain Investor pursuant to its Subscription Agreement.

(4)

Includes 1,200,000 shares acquired in the PIPE Financing.

(5)

Excludes shares acquired by certain public investors in connection with the PIPE Financing.

(6)

Includes 3,000,000 shares acquired by the Perceptive PIPE Investor in the PIPE Financing.

(7)

Includes 4,236,500 shares held by the Initial Shareholders originally acquired prior to or in connection with ARYA’s initial public offering (including 30,000 shares held by each of Todd Wider, Chad Robins and Jake Bauer).

(8)

Excludes shares acquired by Bain Investor, Pfizer and the Perceptive PIPE Investor in the PIPE Financing.

(9)

Represents shares of common stock of Cerevel acquired upon vesting of restricted stock units, which shares will be converted to shares of New Cerevel Common Stock in connection with the Business Combination. Excludes restricted stock units that will not be vested immediately following the closing.

For further details, see “Business Combination Proposal—Consideration to Cerevel Equityholders in the Business Combination.”



 

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Date, Time and Place of Extraordinary General Meeting of ARYA’s Shareholders

The extraordinary general meeting of ARYA, will be held at 10:30 a.m., Eastern Time, on October 26, 2020, at the offices of Kirkland & Ellis LLP, located at 601 Lexington Avenue, New York, New York 10022, to consider and vote upon the proposals to be put to the extraordinary general meeting, including if necessary, the Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, each of the Condition Precedent Proposals have not been approved.

Voting Power; Record Date

ARYA shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on September 4, 2020, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Our warrants do not have voting rights. As of the close of business on the record date, there were 19,186,500 ordinary shares issued and outstanding, of which 14,950,000 were issued and outstanding public shares.

Quorum and Vote of ARYA Shareholders

A quorum of ARYA shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold not less than a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 9,593,251 ordinary shares would be required to achieve a quorum.

The initial shareholders have, pursuant to the Sponsor Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Letter Agreement.

The proposals presented at the extraordinary general meeting require the following votes:

 

  (i)

Business Combination Proposal: The approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (ii)

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (iii)

Governing Documents Proposals: The separate approval of each of the Governing Documents Proposals requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, save for Governing Documents Proposal A, which proposes to amend ARYA’s authorized share capital and which will require an ordinary resolution, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.



 

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  (iv)

Nasdaq Proposal: The approval of the Nasdaq Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (v)

Incentive Award Plan Proposal: The approval of the Incentive Award Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

 

  (vi)

Employee Stock Purchase Plan Proposal: The approval of the Employee Stock Purchase Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

 

  (vii)

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Redemption Rights

Pursuant to the Existing Governing Documents, a public shareholder may request of ARYA that New Cerevel redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

 

  (ii)

submit a written request to Continental, ARYA’s transfer agent, in which you (i) request that New Cerevel redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

 

  (iii)

deliver your public shares to Continental, ARYA’s transfer agent, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on October 22, 2020 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, ARYA’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders (other than those who have agreed not to do so by executing an ARYA Shareholder Transaction Support Agreement) may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to



 

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redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, ARYA’s transfer agent, New Cerevel will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of September 30, 2020, this would have amounted to approximately $10.005 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and accordingly it is shares of New Cerevel Common Stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of ARYA—Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The initial shareholders have, pursuant to the Sponsor Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive their anti-dilution rights with respect to their Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Letter Agreement.

Holders of the warrants will not have redemption rights with respect to the warrants.

Appraisal Rights

Neither ARYA shareholders nor ARYA warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. ARYA has engaged Morrow to assist in the solicitation of proxies.

If a shareholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the extraordinary general meeting. A shareholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of ARYA—Revoking Your Proxy.”

Interests of ARYA Directors and Executive Officers in the Business Combination

When you consider the recommendation of the ARYA Board in favor of approval of the Business Combination Proposal, you should keep in mind that the initial shareholders, including ARYA’s directors and executive officers, have interests in such proposal that are different from, or in addition to, those of ARYA



 

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shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

 

   

the fact that our intial shareholders have agreed not to redeem any Class A ordinary shares held by them in connection with a shareholder vote to approve a proposed intial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the 3,737,500 Class B ordinary shares currently owned by the initial shareholders and such securities will have a significantly higher value at the time of the Business Combination;

 

   

the fact that Sponsor paid $4,990,000 for its private placement units, and the Class A ordinary shares and private placement warrants underlying those units would be worthless if a business combination is not consummated by June 9, 2022 (unless such date is extended in accordance with the Existing Governing Documents);

 

   

the fact that the initial shareholders and ARYA’s other current officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if ARYA fails to complete an initial business combination by June 9, 2022;

 

   

the fact that the Amended and Restated Registration and Shareholder Rights Agreement will be entered into by the Messrs. Bauer, Robins and Wider;

 

   

the fact that, at the option of the Sponsor, any amounts outstanding under any loan made by the Sponsor or any of its affiliates to ARYA in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A ordinary shares in connection with the consummation of the Business Combination;

 

   

the continued indemnification of ARYA’s directors and officers and the continuation of ARYA’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”);

 

   

the fact that the Sponsor and ARYA’s officers and directors will lose their entire investment in ARYA and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by June 9, 2022;

 

   

the fact that if the trust account is liquidated, including in the event ARYA is unable to complete an initial business combination by June 9, 2022, the Sponsor has agreed to indemnify ARYA to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which ARYA has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ARYA, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account; and

 

   

the fact that ARYA may be entitled to distribute or pay over funds held by ARYA outside the Trust Account to the Sponsor or any of its Affiliates prior to the Closing.

The initial shareholders have, pursuant to the Sponsor Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive their anti-dilution rights with respect to their Class B ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Letter Agreement.



 

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At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, our initial shareholders, Cerevel and/or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our initial shareholders, Cerevel and/or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposal A, the Nasdaq Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter (ii) the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D and the Governing Documents Proposal E are approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (iii) otherwise limit the number of public shares electing to redeem and (iv) New Cerevel’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing.

Entering into any such arrangements may have a depressive effect on the ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he or she owns, either at or prior to the Business Combination.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

The existence of financial and personal interests of one or more of ARYA’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of ARYA and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, ARYA’s officers have interests in the Business Combination that may conflict with your interests as a shareholder.

Recommendation to Shareholders of ARYA

The ARYA Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of ARYA and its shareholders and unanimously



 

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recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the Governing Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of ARYA’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of ARYA and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, ARYA’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of ARYA’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Sources and Uses of Funds for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination assuming a Closing Date of September 30, 2020, and (i) assuming that none of ARYA’s outstanding public shares are redeemed in connection with the Business Combination and (ii) assuming that, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, all of ARYA’s outstanding public shares are redeemed in connection with the Business Combination.

No Redemption

 

Source of Funds(1)

(in thousands)

    

Uses(1)
(in thousands)

 

Existing Cash held in trust account(2)

   $ 149,500     

Shares of New Cerevel Common Stock issued to Cerevel
Equityholders(3)

   $ 780,000  

Shares of New Cerevel Common Stock issued to Cerevel Equityholders(3)

     780,000     

Transaction Fees and Expenses

     25,000  

PIPE Financing(4)

     320,000     

Remaining Cash on Balance Sheet(5)

     444,500  
  

 

 

       

 

 

 

Total Sources

   $ 1,249,500     

Total Uses

   $ 1,249,500  
  

 

 

       

 

 

 

 

(1)

Totals might be affected by rounding.

(2)

As of June 9, 2020.

(3)

Shares issued to Cerevel are at a deemed value of $10.00 per share. Assumes 78,000,000 shares are issued to the Cerevel Shareholders.

(4)

Includes $25 million pre-funding from Bain Investor to meet Cerevel operational needs prior to Closing in exchange for shares of Cerevel, which shares reduce Bain Investor’s commitment to provide PIPE Financing by an equal amount and will be converted into shares of New Cerevel Common Stock on the same terms as the PIPE Financing.

(5)

Does not include an aggregate of 5,149,666 ARYA warrants outstanding with an exercise price of $11.50 per share.



 

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Maximum Redemption

 

Source of Funds(1)
(in thousands)

    

Uses(1)
(in thousands)

 

Existing Cash held in trust account

   $ 0     

Shares of New Cerevel Common Stock issued to Cerevel
Equityholders(2)

   $ 780,000  

Shares of New Cerevel Common Stock issued to Cerevel Equityholders(2)

     780,000     

Transaction Fees and Expenses

     25,000  

PIPE Financing(3)

     320,000     

Remaining Cash on Balance Sheet(4)

     295,000  
  

 

 

       

 

 

 

Total Sources

   $ 1,100,000     

Total Uses

   $ 1,100,000  
  

 

 

       

 

 

 

 

(1)

Totals might be affected by rounding.

(2)

Shares issued to Cerevel are at a deemed value of $10.00 per share. Assumes 78,000,000 shares are issued to the Cerevel Shareholders.

(3)

Includes $25 million pre-funding from Bain Investor to meet Cerevel operational needs prior to Closing in exchange for shares of Cerevel, which shares reduce Bain Investor’s commitment to provide PIPE Financing by an equal amount and will be converted into shares of New Cerevel Common Stock on the same terms as the PIPE Financing.

(4)

Does not include an aggregate of 5,149,666 ARYA warrants outstanding with an exercise price of $11.50 per share.

U.S. Federal Income Tax Considerations

For a discussion summarizing the U.S. federal income tax considerations of the Domestication and exercise of redemption rights, please see “U.S. Federal Income Tax Considerations.”

Expected Accounting Treatment

The Domestication

There will be no accounting effect or change in the carrying amount of the consolidated assets and liabilities of ARYA as a result of the Domestication. The business, capitalization, assets and liabilities and financial statements of New Cerevel immediately following the Domestication will be the same as those of ARYA immediately prior to the Domestication.

The Business Combination

The Business Combination will be accounted for as a reverse recapitalization in conformity with accounting principles generally accepted in the United States of America, or GAAP. Under this method of accounting, ARYA has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on existing Cerevel Shareholders comprising a relative majority of the voting power of the combined company, Cerevel’s operations prior to the acquisition comprising the only ongoing operations of New Cerevel, and Cerevel’s senior management comprising a majority of the senior management of New Cerevel. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Cerevel with the Business Combination being treated as the equivalent of Cerevel issuing stock for the net assets of ARYA, accompanied by a recapitalization. The net assets of ARYA will be stated at historical costs, with no goodwill or other intangible assets recorded.

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the U.S. Federal Trade Commission (“FTC”), certain transactions may not be consummated unless information has been furnished to the



 

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Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The ARYA portion of the Business Combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. ARYA and Cerevel will file the required forms under the HSR Act with the Antitrust Division and the FTC and requesting early termination within five (5) Business Days following the date hereof.

At any time before or after consummation of the Business Combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities in the United States or any other applicable jurisdiction could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of New Cerevel’s assets, subjecting the completion of the Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. ARYA cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, ARYA cannot assure you as to its result.

None of ARYA and Cerevel are aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

Emerging Growth Company

ARYA is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. ARYA has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, ARYA, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of ARYA’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of ARYA’s initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which



 

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means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Smaller Reporting Company

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.

Risk Factors

In evaluating the proposals to be presented at the ARYA extraordinary general meeting, a shareholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.”



 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF ARYA

ARYA is providing the following selected historical financial data to assist you in your analysis of the financial aspects of the Business Combination. Such data as of June 9, 2020 (the closing date of our initial public offering), and for the period from February 20, 2020 (inception) through June 9, 2020, are derived from ARYA’s audited financial statements included elsewhere in this proxy statement/prospectus. The selected historical financial data as of June 30, 2020, for the period from February 20, 2020 (inception) through June 30, 2020 and for the three months ended June 30, 2020 are derived from ARYA’s unaudited financial statements included elsewhere in this proxy statement/prospectus.

The information is only a summary and should be read in conjunction with ARYA’s consolidated financial statements and related notes and “ARYA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus. ARYA’s historical results are not necessarily indicative of future results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

 

    For Three Months
Ended
June 30, 2020
(unaudited)
    Period from
February 20, 2020
(inception) to
June 30, 2020
(unaudited)
    Period from
February 20, 2020
(inception) to
June 9, 2020
(audited)
 

Statement of Operations Data:

     

General and administrative costs

  $ 185,367     $ 220,105     $ 57,107  
 

 

 

   

 

 

   

 

 

 

Net loss

  $ (198,780   $ (233,518   $ (57,107
 

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding of Class A ordinary shares

    15,449,000       15,449,000       15,449,000  
 

 

 

   

 

 

   

 

 

 

Basic and diluted net income per share, Class A ordinary shares

  $ (0.00   $ (0.00   $ —    
 

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding of Class B ordinary shares

    3,737,500       3,737,500       3,737,500  
 

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share, Class B ordinary shares

  $ (0.05   $ (0.06   $ (0.02
 

 

 

   

 

 

   

 

 

 

 

    June 30, 2020
(unaudited)
    June 9, 2020
(audited)
 
 

 

 

   

 

 

 

Condensed Balance Sheet Data (At Period End):

   

Working capital

  $ 1,226,874     $ 1,375,053  

Total assets

  $ 151,119,239     $ 151,271,781  

Total liabilities

  $ 5,638,278     $ 5,629,228  

Class A ordinary shares (excluding 14,048,096 shares subject to possible redemption at June 30, 2020)

  $ 140     $ 139  

Class A ordinary shares (including 14,048,096 subject to possible redemption)

  $ 140,480,960     $ 140,642,550  

Class B ordinary shares

  $ 374     $ 374  

Total shareholders’ equity (deficit)

  $ 5,000,001     $ 5,000,003  
    Period from
February 20, 2020
(inception) to
June 30, 2020
(unaudited)
    Period from
February 20, 2020
(inception) to
June 9, 2020
(audited)
 

Cash Flow Data:

   

Net cash used in operating activities

  $ (446,121   $ (424,813

Net cash used in investing activities

    (149,500,000     (149,500,000

Net cash provided by financing activities

    151,209,257       151,324,794  


 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF CEREVEL

You should read the following selected historical financial data of Cerevel together with Cerevel’s audited consolidated financial statements and the related notes and Cerevel’s unaudited condensed consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus and the information in the section entitled “Cerevel’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Cerevel has derived the selected statements of operations data for the period from July 23, 2018, or Inception, to December 31, 2018, and for the year ended December 31, 2019, and the balance sheet data as of December 31, 2018 and 2019, from Cerevel’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus. The consolidated statements of operations data for the six months ended June 30, 2019 and 2020, and the consolidated balance sheet data as of June 30, 2020, have been derived from Cerevel’s unaudited condensed consolidated financial statements included elsewhere in this proxy statement/prospectus and have been prepared on the same basis as Cerevel’s audited consolidated financial statements. In the opinion of Cerevel’s management, the unaudited data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information contained in those statements. Cerevel’s historical results from any prior period are not necessarily indicative of the results that may be expected in the future, and Cerevel’s results from any interim period are not necessarily indicative of the results that may be expected for any full-year or future period.

The following tables set forth Cerevel’s historical financial information as of, and for the periods ended on, the dates indicated.

 

     Period from
Inception to
December 31,
2018
    For the
Year Ended
December 31,
2019
    For the Six Months
Ended June 30,
 

(in thousands, except per share amounts)

 

2019

   

2020

 

Consolidated Statements of Operations and Comprehensive Loss Data:

        

Operating expenses:

        

Research and development

   $ 113,663     $ 50,294     $ 10,984     $ 49,142  

General and administrative

     7,168       33,169       9,097       23,716  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     120,831       83,463       20,081       72,858  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (120,831     (83,463     (20,081     (72,858

Interest income, net

     509       1,552       992       209  

Other income (expense), net

     4,413       (46,433     (17,443     (7,292
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (115,909     (128,344     (36,532     (79,941
  

 

 

   

 

 

   

 

 

   

 

 

 

Income tax (provision) benefit, net

     —         (45     —         16  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss and comprehensive loss

   $ (115,909   $ (128,389   $ (36,532   $ (79,925
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share, basic and diluted(1)

   $ (41.23   $ (27.60   $ (7.93   $ (12.46
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares used in calculating net loss per share, basic and diluted(1)

     2,811       4,651       4,604       6,413  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

See Notes 3 and 13 in the notes to Cerevel’s audited consolidated financial statements and Note 12 to Cerevel’s unaudited condensed consolidated financial statements included elsewhere in this proxy statement/prospectus for an explanation of the calculation of Cerevel’s basic and diluted net loss per share, the weighted-average common shares used in computing basic and diluted net loss per share.



 

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Table of Contents

(In thousands)

   As of
December 31, 2018
     As of
December 31, 2019
     As of
June 30,
2020
 

Consolidated Balance Sheet Data:

        

Cash and cash equivalents

   $ 95,443      $ 79,551      $ 17,968  

Working capital(1)

     93,570        72,201        (876

Total assets

     107,662        120,806        61,881  

Operating lease liability, net of current portion

     —          25,819        25,037  

Total liabilities

     7,969        42,983        57,590  

Convertible preferred stock

     177,069        245,878        245,878  

Accumulated deficit

     (115,909      (244,298      (324,223

Total stockholders’ deficit

     (77,376      (168,055      (241,587

 

(1)

Cerevel defines working capital as current assets less current liabilities.



 

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SUMMARY UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information has been derived from the unaudited pro forma condensed combined balance sheet as of June 30, 2020 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2019 and the six months ended June 30, 2020 included in “Unaudited Pro Forma Condensed Combined Financial Information.”

The summary unaudited pro forma condensed combined financial information should be read in conjunction with the unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed combined statement of operations, and the accompanying notes. In addition, the unaudited condensed combined pro forma financial information was based on and should be read in conjunction with the historical financial statements of ARYA and Cerevel, including the accompanying notes, which are included elsewhere in this proxy statement/prospectus.

The Business Combination will be accounted for as a reverse capitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, ARYA is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Cerevel with the Business Combination being treated as the equivalent of Cerevel issuing stock for the net assets of ARYA, accompanied by a recapitalization. The net assets of ARYA are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Cerevel.

The unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of redemption into cash of ARYA’s ordinary shares:

 

   

Assuming No Redemptions: This presentation assumes that no ARYA shareholders exercise redemption rights with respect to their public shares.

 

   

Assuming Maximum Redemptions: This presentation assumes that all of ARYA’s public shareholders, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, exercise redemption rights with respect to their Class A ordinary shares. This scenario assumes that 14,950,000 Class A ordinary shares are redeemed for an aggregate redemption payment of approximately $149.5 million. This maximum redemption scenario is based on the maximum number of redemptions which may occur but which would still provide the minimum aggregate Business Combination and PIPE Financing proceeds of $250.0 million, consisting of ARYA trust account funds and PIPE Financing proceeds less ARYA’s unpaid expenses, to be delivered at Closing of the Business Combination and the PIPE Financing.

(in thousands, except per share amounts)

 

     Historical      Pro forma  
     ARYA      Cerevel      No
redemption
scenario
     Maximum
redemption
scenario
 

Statement of Operations Data—For the Six Months Ended June 30, 2020

           

Total operating expenses

   $ 221      $ 72,858      $ 69,975      $ 69,975  

Loss from operations

     (221      (72,858      (69,975      (69,975

Net loss and comprehensive loss

     (234      (79,925      (69,752      (69,752

Basic and diluted net loss per share

     (0.00      (12.46      (0.55      (0.62


 

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(in thousands, except per share amounts)

 

     Historical      Pro forma  
     ARYA      Cerevel      No
redemption
scenario
     Maximum
redemption
scenario
 

Statement of Operations Data—For the Year Ended December 31, 2019

           

Total operating expenses

   $         —      $ 83,463      $ 82,463      $ 82,463  

Loss from operations

     —          (83,463      (82,463      (82,463

Net loss and comprehensive loss

     —          (128,389      (80,947      (80,947

Basic and diluted net loss per share

     —          (27.60      (0.64      (0.72

(in thousands, except per share amounts)

 

     Historical      Pro forma  
     ARYA      Cerevel      No
redemption
scenario
     Maximum
redemption
scenario
 

Balance Sheet Data—As of June 30, 2020

           

Total current assets

   $ 1,633      $ 21,894      $ 468,014      $ 318,527  

Total assets

     151,120        61,881        507,577        358,090  

Total current liabilities

     407        22,770        22,615        22,615  

Total liabilities

     5,640        57,590        47,885        47,885  

Convertible preferred stock

     —          245,878        —          —    

Class A ordinary shares, subject to possible redemption

     140,481        —          —          —    

Total stockholders’ equity (deficit)

     4,999        (241,587      459,692        310,205  


 

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COMPARATIVE PER SHARE DATA

The following table sets forth:

 

   

historical per share information of ARYA for the period from February 20, 2020 (inception) through June 30, 2020;

 

   

historical per share information of Cerevel for the year ended December 31, 2019 and the six months ended June 30, 2020; and

 

   

unaudited pro forma per share information of the combined company for the year ended December 31, 2019 and the six months ended June 30, 2020 after giving effect to the Business Combination and PIPE Financing, assuming two redemption scenarios as follows:

 

   

Assuming No Redemptions: This presentation assumes that no ARYA shareholders exercise redemption rights with respect to their public shares.

 

   

Assuming Maximum Redemptions: This presentation assumes that all of ARYA’s public shareholders, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, exercise redemption rights with respect to their Class A ordinary shares. This scenario assumes that 14,950,000 Class A ordinary shares are redeemed for an aggregate redemption payment of approximately $149.5 million. This maximum redemption scenario is based on the maximum number of redemptions which may occur but which would still provide the minimum aggregate Business Combination and PIPE Financing proceeds of $250.0 million, consisting of ARYA trust account funds and PIPE Financing proceeds less ARYA’s unpaid expenses, to be delivered at Closing of the Business Combination and the PIPE Financing.

The following table is also based on the assumption that 32,000,000 shares of New Cerevel Common Stock are issued to the PIPE Investors upon the consummation of the PIPE Financing or deemed issued in connection with any pre-funding by Bain Investor pursuant to its Subscription Agreement. If the actual facts are different than this assumption, the below numbers will be different. These numbers also do not take into account public and private warrants to purchase New Cerevel Common Stock that will be outstanding immediately following the completion of the Business Combination.

The historical information should be read in conjunction with “Selected Historical Financial Information of Cerevel,” “Selected Historical Financial Information of ARYA,” “Cerevel’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “ARYA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus and the audited consolidated financial statements and the related notes of Cerevel and ARYA contained elsewhere in this proxy statement/prospectus.

The unaudited pro forma per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined net loss per share information below does not purport to represent what the actual results of operations of New Cerevel would have been had the Business Combination been completed or to project New Cerevel results of operations that may be achieved after the Business Combination. The unaudited pro forma book value per share information below does not purport to represent what the book value of New Cerevel would have been had the Business Combination been completed nor the book value per share for any future date or period.



 

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     Historical      Pro forma  
     ARYA      Cerevel      No
redemption
scenario
     Maximum
redemption
scenario
 

As of and for the Six Months ended June 30, 2020

           

Book value per share—basic and diluted(1)

   $ 3.57      $ (37.64    $ 3.61      $ 2.76  

Net loss per share—basic and diluted(2)

     (0.00      (12.46      (0.55      (0.62

 

     Historical      Pro forma  
     ARYA      Cerevel      No
redemption
scenario
     Maximum
redemption
scenario
 

For the Year Ended December 31, 2019

           

Net loss per share—basic and diluted(2)

     n/a      $ (27.60    $ (0.64    $ (0.72

 

(1)

Book value per share is calculated as total equity divided by:

   

Class A ordinary shares outstanding at June 30, 2020 for ARYA;

   

Common shares outstanding at June 30, 2020 for Cerevel;

   

Common shares outstanding at June 30, 2020 for the pro forma information.

(2)

Net income per common share and cash distributions per common share are based on:

   

Weighted average number of Class A ordinary shares outstanding for the six months ended June 30, 2020 for ARYA;

   

Weighted average number of common shares outstanding for the six months ended June 30, 2020 and the year ended December 31, 2019 for Cerevel;

   

Weighted average number of common shares outstanding for the six months ended June 30, 2020 and the year ended December 31, 2019 for the pro forma information.



 

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RISK FACTORS

ARYA shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to our business, financial condition and prospects.

Risks Related to ARYA’s Business and to New Cerevel’s Business Following the Business Combination

Unless the context otherwise requires, any reference in the below sections of this proxy statement/prospectus to the “we,” “us” or “our” refers to ARYA and its consolidated subsidiaries prior to the consummation of the Business Combination and to New Cerevel and its consolidated subsidiaries following the Business Combination. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and accompanying notes, and other financial information included elsewhere within this proxy statement/prospectus. This discussion includes forward-looking information regarding our business, results of operations and cash flows and contractual obligations and arrangements that involves risks, uncertainties and assumptions. Our actual results may differ materially from any future results expressed or implied by such forward-looking statements as a result of various factors, including, but not limited to, those discussed in the sections of this proxy statement/prospectus entitled “Cautionary Note Regarding Forward-Looking Statements” and “ARYA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Cerevel is a clinical-stage biopharmaceutical company with a limited operating history and Cerevel has incurred significant financial losses since its inception. Cerevel anticipates that it will continue to incur significant financial losses for the foreseeable future.

Cerevel is a clinical-stage biopharmaceutical company with a limited operating history. Cerevel was formed in July 2018 and its operations to date have been limited. All of Cerevel’s product candidates were initially developed by Pfizer, which Cerevel in-licensed pursuant to a license agreement, or the Pfizer License Agreement, entered into shortly after Cerevel’s formation. Cerevel has not yet demonstrated an ability to generate revenues, obtain regulatory approvals, manufacture any product on a commercial scale or arrange for a third party to do so on Cerevel’s behalf, or conduct sales and marketing activities necessary for successful product commercialization.

Cerevel has no products approved for commercial sale and has not generated any revenue from product sales to date, nor does it expect to generate any revenue from product sales for the next few years, if ever. Cerevel will continue to incur significant research and development and other expenses related to its preclinical and clinical development and ongoing operations. As a result, Cerevel is not profitable and has incurred losses in each period since its inception. Net losses and negative cash flows have had, and will continue to have, an adverse effect on Cerevel’s stockholders’ equity and working capital. Cerevel’s net loss was $115.9 million for the period from July 23, 2018 (Inception) to December 31, 2018, and $128.4 million for the year ended December 31, 2019. As of March 31, 2020, Cerevel had an accumulated deficit of $297.5 million. Cerevel expects to continue to incur significant losses for the foreseeable future, and it expects these losses to increase as Cerevel continues its research and development of, and seek regulatory approvals for, Cerevel’s product candidates.

Cerevel anticipates that its expenses will increase substantially if, and as, it:

 

   

advances its clinical-stage product candidates CVL-231, CVL-865, tavapadon, CVL-781 and CVL-936 through clinical development, including as it initiates its registration-directed Phase 3 program for its most advanced product candidate, tavapadon;

 

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advance its preclinical stage product candidates into clinical development;

 

   

seeks to identify, acquire and develop additional product candidates, including through business development efforts to invest in or in-license other technologies or product candidates;

 

   

hires additional clinical, quality control, medical, scientific and other technical personnel to support its clinical operations;

 

   

expands its operational, financial and management systems and increases personnel to support its operations;

 

   

meets the requirements and demands of being a public company;

 

   

maintains, expands and protects its intellectual property portfolio;

 

   

makes milestone, royalty or other payments due under the Pfizer License Agreement and any future in-license or collaboration agreements;

 

   

seeks regulatory approvals for any product candidates that successfully complete clinical trials; and

 

   

undertakes any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which it may receive regulatory approval in regions where it choose to commercialize its products on its own or jointly with third parties.

Biopharmaceutical product development entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, secure market access and reimbursement and become commercially viable and therefore any investment in Cerevel is highly speculative. Accordingly, before making an investment in Cerevel, you should consider its prospects, factoring in the costs, uncertainties, delays and difficulties frequently encountered by companies in clinical development, especially clinical-stage biopharmaceutical companies such as Cerevel’s. Any predictions you make about Cerevel’s future success or viability may not be as accurate as they would otherwise be if Cerevel had a longer operating history or a history of successfully developing and commercializing pharmaceutical products. Cerevel may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving its business objectives.

Additionally, Cerevel’s expenses could increase beyond its expectations if it is required by the U.S. Food and Drug Administration, or FDA, or other regulatory authorities to perform clinical trials in addition to those that Cerevel currently expects, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing its clinical trials or the development of any of Cerevel’s product candidates.

Cerevel has never generated revenue from product sales and may never be profitable.

Cerevel’s ability to become and remain profitable depends on its ability to generate revenue or execute other business development arrangements. Cerevel does not expect to generate significant revenue, if any, unless and until Cerevel is able to obtain regulatory approval for, and successfully commercialize the product candidates Cerevel is developing or may develop. Successful commercialization will require achievement of many key milestones, including demonstrating safety and efficacy in clinical trials, obtaining regulatory approval for these product candidates, manufacturing, marketing and selling those products for which Cerevel may obtain regulatory approval, satisfying any post-marketing requirements and obtaining reimbursement for its products from private insurance or government payors. Because of the uncertainties and risks associated with these activities, Cerevel is unable to accurately and precisely predict the timing and amount of revenues, the extent of any further losses or if or when Cerevel might achieve profitability. Cerevel may never succeed in these activities and, even if Cerevel does, Cerevel may never generate revenues that are significant enough for Cerevel to achieve profitability. Even if Cerevel does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis.

Cerevel’s failure to become and remain profitable may depress the market price of its common stock and could impair its ability to raise capital, expand its business, diversify its product offerings or continue its

 

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operations. If Cerevel continues to suffer losses as it has since inception, investors may not receive any return on their investment and may lose their entire investment.

Even if Cerevel consummates this transaction, Cerevel will need substantial additional funding, and if it is unable to raise capital when needed, Cerevel could be forced to delay, reduce or terminate its product discovery and development programs or commercialization efforts.

Cerevel’s operations have consumed substantial amounts of cash since inception. Cerevel expects to continue to spend substantial amounts to continue the clinical and preclinical development of Cerevel’s product candidates, including its Phase 3 program for tavapadon and planned clinical trials for CVL-865, CVL-231, CVL-871 and CVL-936. Cerevel will need to raise additional capital to complete its currently planned clinical trials and any future clinical trials. Other unanticipated costs may arise in the course of its development efforts. If Cerevel is able to gain marketing approval for product candidates that it develops, Cerevel will require significant additional amounts of funding in order to launch and commercialize such product candidates. Cerevel cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of any product candidate it develops and Cerevel may need substantial additional funding after consummation of this transaction to complete the development and commercialization of Cerevel’s product candidates.

Cerevel’s future need for additional funding depends on many factors, including:

 

   

the scope, progress, results and costs of researching and developing its current product candidates, as well as other additional product candidates Cerevel may develop and pursue in the future;

 

   

the timing of, and the costs involved in, obtaining marketing approvals for Cerevel’s product candidates and any other additional product candidates Cerevel may develop and pursue in the future;

 

   

the number of future product candidates that Cerevel may pursue and their development requirements;

 

   

subject to receipt of regulatory approval, the costs of commercialization activities for Cerevel’s product candidates, to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

 

   

subject to receipt of regulatory approval, revenue, if any, received from commercial sales of Cerevel’s product candidates or any other additional product candidates Cerevel may develop and pursue in the future;

 

   

the achievement of milestones that trigger payments under the Pfizer License Agreement;

 

   

the royalty payments due under the Pfizer License Agreement;

 

   

the extent to which Cerevel in-license or acquire rights to other products, product candidates or technologies;

 

   

its ability to establish collaboration arrangements for the development of Cerevel’s product candidates on favorable terms, if at all;

 

   

its headcount growth and associated costs as Cerevel expands its research and development and establish a commercial infrastructure;

 

   

the costs of preparing, filing and prosecuting patent applications, maintaining and protecting its intellectual property rights, including enforcing and defending intellectual property related claims; and

 

   

the costs of operating as a public company.

Cerevel cannot be certain that additional funding will be available on acceptable terms, or at all. If Cerevel is unable to raise additional capital in sufficient amounts or on terms acceptable to Cerevel, Cerevel may have to significantly delay, reduce or terminate its product development programs or plans for commercialization.

 

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Cerevel believes that the net proceeds from this transaction, together with its existing cash and cash equivalents, will enable Cerevel to fund its operating expenses and capital expenditure requirements into 2023. Cerevel’s estimate may prove to be wrong, and Cerevel could use its available capital resources sooner than Cerevel currently expects. Further, changing circumstances, some of which may be beyond its control, could cause Cerevel to consume capital significantly faster than Cerevel currently anticipates, and Cerevel may need to seek additional funds sooner than planned.

Due to the significant resources required for the development of Cerevel’s pipeline, and depending on its ability to access capital, Cerevel must prioritize the development of certain product candidates over others. Moreover, Cerevel may fail to expend its limited resources on product candidates or indications that may have been more profitable or for which there is a greater likelihood of success.

Cerevel currently has five clinical-stage product candidates as well as several other product candidates that are at various stages of preclinical development. Cerevel seek to maintain a process of prioritization and resource allocation to maintain an optimal balance between aggressively pursuing its more advanced clinical-stage product candidates, such as tavapadon and CVL-865, and ensuring the development of additional potential product candidates.

Due to the significant resources required for the development of Cerevel’s product candidates, Cerevel must focus on specific diseases and disease pathways and decide which product candidates to pursue and advance and the amount of resources to allocate to each. Cerevel’s decisions concerning the allocation of research, development, collaboration, management and financial resources toward particular product candidates or therapeutic areas may not lead to the development of any viable commercial products and may divert resources away from better opportunities. If Cerevel makes incorrect determinations regarding the viability or market potential of any of Cerevel’s product candidates or misread trends in the pharmaceutical industry, in particular for disorders of the brain and nervous system, its business, financial condition, and results of operations could be materially adversely affected. As a result, Cerevel may fail to capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other diseases and disease pathways that may later prove to have greater commercial potential than those Cerevel chooses to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing, or other royalty arrangements in cases in which it would have been advantageous for Cerevel to invest additional resources to retain sole development and commercialization rights.

Raising additional capital may cause dilution to Cerevel’s stockholders, including purchasers of shares of its common stock in this transaction, restrict its operations or require Cerevel to relinquish rights to its technologies or product candidates.

Cerevel expects its expenses to increase in connection with its planned operations. Unless and until Cerevel can generate a substantial amount of revenue from Cerevel’s product candidates, Cerevel expects to finance its future cash needs through public or private equity offerings, debt financings, collaborations, licensing arrangements or other sources, or any combination of the foregoing. In addition, Cerevel may seek additional capital due to favorable market conditions or strategic considerations, even if Cerevel believes that Cerevel has sufficient funds for its current or future operating plans.

To the extent that Cerevel raises additional capital through the sale of common stock, convertible securities or other equity securities, your ownership interest may be diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that could adversely affect your rights as a common stockholder. In addition, debt financing, if available, may result in fixed payment obligations and may involve agreements that include restrictive covenants that limit its ability to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact its ability to conduct its business. In addition, securing financing could require a substantial amount of time and attention from its management and may divert a disproportionate amount of their attention

 

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away from day-to-day activities, which may adversely affect its management’s ability to oversee the development of Cerevel’s product candidates.

If Cerevel raises additional capital through collaborations or marketing, distribution or licensing arrangements with third parties, Cerevel may have to relinquish valuable rights to its technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to Cerevel. If Cerevel is unable to raise additional capital when needed, Cerevel may be required to delay, reduce or terminate its product discovery and development programs or commercialization efforts or grant rights to develop and market product candidates that Cerevel would otherwise prefer to develop and market itself.

The amount of Cerevel’s future losses is uncertain and Cerevel’s quarterly and annual operating results may fluctuate significantly or fall below the expectations of investors or securities analysts, each of which may cause its stock price to fluctuate or decline.

Cerevel’s quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of its control and may be difficult to predict, including the following:

 

   

the timing and success or failure of clinical trials for Cerevel’s product candidates or competing product candidates, or any other change in the competitive landscape of its industry, including consolidation among its competitors or partners or as a result of COVID-19;

 

   

its ability to successfully recruit and retain subjects for clinical trials, and any delays caused by difficulties in such efforts, including as a result of COVID-19;

 

   

its ability to obtain marketing approval for Cerevel’s product candidates and the timing and scope of any such approvals Cerevel may receive;

 

   

the timing and cost of, and level of investment in, research and development activities relating to Cerevel’s product candidates, which may change from time to time;

 

   

the cost of manufacturing Cerevel’s product candidates, which may vary depending on the quantity of production and the terms of its agreements with manufacturers;

 

   

its ability to attract, hire and retain qualified personnel;

 

   

expenditures that Cerevel will or may incur to develop additional product candidates;

 

   

the level of demand for its product candidates should they receive approval, which may vary significantly;

 

   

the risk/benefit profile, cost and reimbursement policies with respect to Cerevel’s product candidates, if approved, and existing and potential future therapeutics that compete with Cerevel’s product candidates;

 

   

the changing and volatile U.S. and global economic environments; and

 

   

future accounting pronouncements or changes in its accounting policies.

The cumulative effects of these factors could result in large fluctuations and unpredictability in its quarterly and annual operating results. As a result, comparing its operating results on a period-to-period basis may not be meaningful. This variability and unpredictability could also result in its failing to meet the expectations of industry or financial analysts or investors for any period. If its operating results or revenue fall below the expectations of analysts or investors or below any forecasts Cerevel may provide to the market, or if the forecasts Cerevel provides to the market are below the expectations of analysts or investors, the price of its common stock could decline substantially. Such a stock price decline could occur even when Cerevel has met any previously publicly stated guidance Cerevel may provide.

 

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Cerevel’s business is highly dependent on the success of Cerevel’s product candidates. If Cerevel is unable to successfully complete clinical development, obtain regulatory approval for or commercialize one or more of Cerevel’s product candidates, or if Cerevel experiences delays in doing so, its business will be materially harmed.

To date, Cerevel as an organization have not completed any clinical trials or development of any product candidates. Cerevel’s future success and ability to generate revenue from Cerevel’s product candidates, which Cerevel does not expect will occur for several years, if ever, is dependent on its ability to successfully develop, obtain regulatory approval for and commercialize one or more of Cerevel’s product candidates. Cerevel initiated its registration-directed Phase 3 program for its most advanced product candidate, tavapadon, in January 2020, which will include two trials in early-stage Parkinson’s, one trial in late-stage Parkinson’s and an open-label safety extension trial. All of its other product candidates are in earlier stages of development and will require substantial additional investment for clinical development, regulatory review and approval in one or more jurisdictions. If any of its product candidates encounters safety or efficacy problems, development delays or regulatory issues or other problems, its development plans and business would be materially harmed.

Cerevel may not have the financial resources to continue development of its product candidates if Cerevel experiences any issues that delay or prevent regulatory approval of, or its ability to commercialize, Cerevel’s product candidates, including:

 

   

its inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that Cerevel’s product candidates are safe and effective;

 

   

insufficiency of its financial and other resources to complete the necessary clinical trials and preclinical studies;

 

   

negative or inconclusive results from its clinical trials, preclinical studies or the clinical trials of others for product candidates similar to Cerevel’s, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon a program;

 

   

product-related adverse events experienced by subjects in its clinical trials, including unexpected toxicity results, or by individuals using drugs or therapeutic biologics similar to Cerevel’s product candidates;

 

   

delays in submitting an Investigational New Drug application, or IND, or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial or a suspension or termination, or hold, of a clinical trial once commenced;

 

   

conditions imposed by the FDA, the European Medicines Agency, or EMA, or comparable foreign regulatory authorities regarding the scope or design of its clinical trials;

 

   

poor effectiveness of Cerevel’s product candidates during clinical trials;

 

   

better than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from its clinical trials;

 

   

delays in enrolling subjects in clinical trials;

 

   

high drop-out rates of subjects from clinical trials;

 

   

inadequate supply or quality of product candidates or other materials necessary for the conduct of its clinical trials;

 

   

greater than anticipated clinical trial or manufacturing costs;

 

   

unfavorable FDA, EMA or comparable regulatory authority inspection and review of a clinical trial site;

 

   

failure of its third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise meet their contractual obligations in a timely manner, or at all;

 

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delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to its therapies in particular; or

 

   

varying interpretations of data by the FDA, EMA and comparable foreign regulatory authorities.

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time- consuming and inherently unpredictable, and if Cerevel is ultimately unable to obtain regulatory approval for Cerevel’s product candidates, its business will be substantially harmed.

Cerevel is not permitted to commercialize, market, promote or sell any product candidate in the United States without obtaining regulatory approval from the FDA. Foreign regulatory authorities, such as the EMA, impose similar requirements. The time required to obtain approval by the FDA and comparable foreign authorities is inherently unpredictable, but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. To date, Cerevel has not submitted an NDA to the FDA or similar drug approval submissions to comparable foreign regulatory authorities for its most advanced product candidate, tavapadon, or any other product candidate. Cerevel must complete additional preclinical studies and clinical trials to demonstrate the safety and efficacy of Cerevel’s product candidates in humans before Cerevel will be able to obtain these approvals.

Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. Cerevel cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. The clinical development of its initial and potential additional product candidates is susceptible to the risk of failure inherent at any stage of development, including failure to demonstrate efficacy in a clinical trial or across a broad population of patients, the occurrence of adverse events that are severe or medically or commercially unacceptable, failure to comply with protocols or applicable regulatory requirements, and determination by the FDA or any comparable foreign regulatory authority that a product candidate may not continue development or is not approvable. It is possible that even if any of Cerevel’s product candidates has a beneficial effect, that effect will not be detected during clinical evaluation as a result of one or more of a variety of factors, including the size, duration, design, measurements, conduct or analysis of its clinical trials. Conversely, as a result of the same factors, its clinical trials may indicate an apparent positive effect of such product candidate that is greater than the actual positive effect, if any. Similarly, in its clinical trials Cerevel may fail to detect toxicity of, or intolerability caused by, such product candidate, or mistakenly believe that Cerevel’s product candidates are toxic or not well tolerated when that is not in fact the case. Serious adverse events, or SAEs, or other AEs, as well as tolerability issues, could hinder or prevent market acceptance of the product candidate at issue.

Cerevel’s current and future product candidates could fail to receive regulatory approval for many reasons, including the following:

 

   

the FDA or comparable foreign regulatory authorities may disagree as to the design or implementation of its clinical trials;

 

   

Cerevel may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;

 

   

the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

 

   

Cerevel may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

 

   

the FDA or comparable foreign regulatory authorities may disagree with its interpretation of data from clinical trials or preclinical studies;

 

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the data collected from clinical trials of Cerevel’s product candidates may not be sufficient to support the submission of an NDA to the FDA or other submission or to obtain regulatory approval in the United States, the European Union or elsewhere;

 

   

the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which Cerevel contract for clinical and commercial supplies; and

 

   

the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering its clinical data insufficient for approval.

This lengthy approval process as well as the unpredictability of clinical trial results may result in its failing to obtain regulatory approval to market any product candidate Cerevel develops, which would substantially harm its business, results of operations and prospects. The FDA and other comparable foreign authorities have substantial discretion in the approval process and determining when or whether regulatory approval will be granted for any product candidate that Cerevel develops. Even if Cerevel believes the data collected from future clinical trials of Cerevel’s product candidates are promising, such data may not be sufficient to support approval by the FDA or any other regulatory authority.

In addition, even if Cerevel were to obtain approval, regulatory authorities may approve any of Cerevel’s product candidates for fewer or more limited indications than Cerevel requests, may not approve the price it intends to charge for its products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could materially harm the commercial prospects for Cerevel’s product candidates.

The FDA, EMA or comparable foreign regulatory authorities may disagree with its regulatory plan for Cerevel’s product candidates.

The general approach for FDA approval of a new drug is dispositive data from two or more well-controlled Phase 3 clinical trials of the product candidate in the relevant patient population. Phase 3 clinical trials typically involve a large number of patients, have significant costs and take years to complete. In addition, there is no assurance that the endpoints and trial designs that Cerevel intends to use for its planned clinical trials, including those that Cerevel has developed based on feedback from regulatory agencies or those that have been used for the approval of similar drugs, will be acceptable for future approvals. For example, while Cerevel has designed its registration-directed Phase 3 program for tavapadon after receiving input and feedback from the FDA, there can be no assurance that the design of its planned clinical trials will be satisfactory to the FDA or that the FDA will not require Cerevel to modify its trials or conduct additional testing, or that completing these trials will result in regulatory approval. See the section entitled “Information about Cerevel—Our Solution–Tavapadon—Ongoing and Planned Clinical Trials—Phase 3 Fixed-Dose Early-Stage Parkinson’s Trial” for a description of its discussions with the FDA regarding the proposed primary endpoint of its Phase 3 trials of tavapadon in early-stage Parkinson’s. Even if its Phase 3 clinical trials in early-stage Parkinson’s achieve their primary endpoint, there can be no assurance that the FDA will find them sufficient to support approval if, for example, FDA determines the contribution of the MDS-UPDRS Part II score to the primary endpoint results to be inadequate. Cerevel’s Phase 2 early-stage Parkinson’s trial of tavapadon did not use the MDS-UPDRS Part II score as a primary endpoint and was therefore not powered to show a statistically significant difference from placebo for this measure. In addition, based on its end-of-Phase 2 meeting with the FDA where Cerevel presented single-dose ECG, multiple- dose ECG and a model-based analysis of Phase 1 data, Cerevel plans to collect time-matched PK and ECG measures in a subset of patients as a sub-study in its planned Phase 3 fixed-dose early-stage Parkinson’s trial. However, there can be no assurance that Cerevel will not be required to conduct additional testing on the safety and tolerability of tavapadon, including with respect to arrhythmia. Additionally, Cerevel is developing CVL-871 for the treatment of dementia-related apathy. There are no currently approved therapies for dementia-related apathy, and Cerevel may experience challenges in defining this indication. There

 

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are limited precedents for trial design, trial endpoints and regulatory pathway for this indication, which may make clinical development and regulatory approval of CVL-871 more challenging.

Cerevel’s clinical trial results may not support approval of Cerevel’s product candidates. In addition, Cerevel’s product candidates could fail to receive regulatory approval, or regulatory approval could be delayed, for many reasons, including the following:

 

   

the FDA, EMA or comparable foreign regulatory authorities may not file or accept its NDA or marketing application for substantive review;

 

   

the FDA, EMA or comparable foreign regulatory authorities may disagree with the dosing regimen, design or implementation of its clinical trials;

 

   

Cerevel may be unable to demonstrate to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities that Cerevel’s product candidates are safe and effective for any of their proposed indications;

 

   

the results of clinical trials may not meet the level of statistical significance required by the FDA, EMA or comparable foreign regulatory authorities for approval;

 

   

Cerevel may be unable to demonstrate that Cerevel’s product candidates’ clinical and other benefits outweigh their safety risks;

 

   

the FDA, EMA or comparable foreign regulatory authorities may disagree with its interpretation of data from preclinical studies or clinical trials;

 

   

the data collected from clinical trials of Cerevel’s product candidates may not be sufficient to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;

 

   

the FDA, EMA or comparable foreign regulatory authorities may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which Cerevel contracts for clinical and commercial supplies; and

 

   

the approval policies or regulations of the FDA, EMA or comparable foreign regulatory authorities may significantly change in a manner rendering its clinical data insufficient for approval.

Business interruptions resulting from the COVID-19 outbreak or similar public health crises could cause a disruption of the development of Cerevel’s product candidates and adversely impact Cerevel’s business.

Public health crises such as pandemics or similar outbreaks could adversely impact Cerevel’s business. In December 2019, a novel strain of a virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease (COVID-19), was reported to have surfaced in Wuhan, China and has since reached multiple other regions and countries worldwide. The COVID-19 pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures.

The continued spread of COVID-19 or other global health matters, such as pandemics, could adversely impact Cerevel’s clinical trials or preclinical studies. For instance, the COVID-19 outbreak could impair Cerevel’s ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography or due to prioritization of hospital resources toward the outbreak and restrictions on travel. Furthermore, some patients may be unwilling to enroll in Cerevel’s trials or be unable to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services. COVID-19 may also negatively

 

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affect the operations of third-party contract research organizations that Cerevel relies upon to carry out its clinical trials or the operations of its third-party manufacturers, which could result in delays or disruptions in the supply of Cerevel’s product candidates. For instance, while Cerevel has taken measures to revise clinical trial protocols in its Phase 3 program of tavapadon for the treatment of Parkinson’s to allow for remote visits, including home delivery of study medication, home health care visits to collect safety data and telemedicine visits to collect clinician-based trial assessments, such measures may not be sufficient to prevent missing data from impacting trial outcomes or delays in enrollment and trial completion caused by COVID-19. The primary endpoint in Cerevel’s early-stage Parkinson’s trials is based, in part, on a physical assessment of motor symptoms performed by a clinician, which cannot be completed remotely, and, if a substantial number of subjects are unable to complete in-person assessments, the completeness and interpretability of the data that Cerevel is able to collect would be impacted, which may require changes to the statistical analysis plan, the enrollment of additional subjects or otherwise negatively affect its ability to use such data to obtain regulatory approval. Similarly, if patients are reluctant to participate in these trials due to fears of COVID-19 infection resulting from regular visits to a healthcare facility, Cerevel may not be able to meet its current trial completion timelines. Any negative impact COVID-19 has to patient enrollment or treatment or the timing and execution of its clinical trials could cause costly delays to its clinical trial activities, which could adversely affect its ability to obtain regulatory approval for and to commercialize Cerevel’s product candidates, increase Cerevel’s operating expenses and have a material adverse effect on its business and financial results. Cerevel may also take temporary precautionary measures intended to help minimize the risk of COVID-19 to its employees, including temporarily requiring all employees to work remotely, suspending all non-essential travel worldwide for its employees and discouraging employee attendance at industry events and in-person work-related meetings. These measures could negatively affect its business. COVID-19 has also caused volatility in the global financial markets and threatened a slowdown in the global economy, which may negatively affect its ability to raise additional capital on attractive terms or at all.

The extent to which COVID-19 impacts Cerevel’s business, results of operation and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, new information that may emerge concerning the severity of COVID-19 or the effectiveness of actions to contain COVID-19 or treat its impact, among others. Cerevel cannot presently predict the scope and severity of any potential business shutdowns or disruptions. If Cerevel or any of the third parties with whom it engages, however, were to experience shutdowns or other business disruptions, Cerevel’s ability to conduct its business in the manner and on the timelines presently planned could be materially and negatively affected, which could have a material adverse impact on its business, results of operation and financial condition.

Cerevel is dependent on third parties having accurately generated, collected, interpreted and reported data from certain preclinical studies and clinical trials that were previously conducted for Cerevel’s product candidates.

Cerevel has in-licensed the rights to all of its current product candidates from Pfizer, for which they undertook prior research and development. Cerevel had no involvement with or control over the preclinical and clinical development of any of Cerevel’s product candidates prior to obtaining its in-license. In addition, Cerevel had no involvement in the development of third-party agents designed to be used in combination with Cerevel’s product candidates, such as levodopa, or L-dopa, which Cerevel intends to study in combination with tavapadon in its Phase 3 late-stage Parkinson’s trial. Therefore, Cerevel is dependent on these third parties having conducted their research and development in accordance with the applicable protocols, legal and regulatory requirements, and scientific standards; having accurately reported the results of all preclinical studies and clinical trials conducted with respect to such product candidates and having correctly collected and interpreted the data from these studies and trials. These risks also apply to any additional product candidates that Cerevel may acquire or in-license in the future. If these activities were not compliant, accurate or correct, the clinical development, regulatory approval or commercialization of Cerevel’s product candidates will be adversely affected.

 

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If Cerevel’s clinical trials fail to replicate positive results from earlier preclinical studies or clinical trials conducted by Cerevel or third parties, Cerevel may be unable to successfully develop, obtain regulatory approval for or commercialize Cerevel’s product candidates.

The results observed from preclinical studies or early-stage clinical trials of Cerevel’s product candidates may not necessarily be predictive of the results of later-stage clinical trials that Cerevel conducts. Similarly, positive results from such preclinical studies or early-stage clinical trials may not be replicated in its subsequent preclinical studies or clinical trials. For instance, while CVL-865 demonstrated anti-epileptic activity similar to lorazepam, a commonly prescribed BZD, in a Phase 2 photoepilepsy trial, only seven patients were treated with CVL-865 in that trial and Cerevel may not be able to replicate the observed results from that trial in its ongoing Phase 2 proof-of-concept trial in drug-resistant focal onset epilepsy. Furthermore, Cerevel’s product candidates may not be able to demonstrate similar activity or adverse event profiles as other product candidates that Cerevel believes may have similar profiles. For instance, although they both activate muscarinic receptors, CVL-231 may not be able to replicate the anti-psychotic benefit observed in prior clinical trials of xanomeline.

In addition, in Cerevel’s planned future clinical trials, Cerevel may utilize clinical trial designs or dosing regimens that have not been tested in prior clinical trials. For instance, in Cerevel’s Phase 3 clinical trials for tavapadon in early- and late-stage Parkinson’s, it plans to use a slower titration method than was used in prior clinical trials. While Cerevel believes that the slower titration method may mitigate certain gastrointestinal and other adverse events, Cerevel cannot provide any assurances that it will provide the desired effects and it may result in unanticipated issues.

There can be no assurance that any of Cerevel’s clinical trials will ultimately be successful or support further clinical development of any of Cerevel’s product candidates. There is a high failure rate for drugs proceeding through clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and Cerevel cannot be certain that it will not face similar setbacks. These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events.

Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA, EMA or comparable foreign regulatory authority approval. For instance, prior clinical trials conducted by Pfizer with certain of Cerevel’s product candidates before Cerevel in-licensed them were terminated before conclusion of the trials. These trials included a Phase 2 trial of tavapadon in late-stage Parkinson’s, a concurrent Phase 2 clinical trial of tavapadon in early-stage Parkinson’s and two Phase 2 trials of CVL-865. These clinical trials did not meet their primary endpoints and, even though Cerevel believes the data generated from these trials support its rationale for further clinical development of these product candidates, Cerevel’s belief is partially based on post-hoc analyses of such data.

Cerevel may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of Cerevel’s product candidates.

To obtain the requisite regulatory approvals to commercialize any of Cerevel’s product candidates, Cerevel must demonstrate through extensive preclinical studies and clinical trials that Cerevel’s product candidates are safe and effective in humans. Cerevel may experience delays in completing its clinical trials or preclinical studies and initiating or completing additional clinical trials or preclinical studies, including as a result of regulators not allowing or delay in allowing clinical trials to proceed under an IND, or not approving or delaying approval for any clinical trial grant or similar approval Cerevel need to initiate a clinical trial. Cerevel may also experience numerous unforeseen events during its clinical trials that could delay or prevent its ability to receive marketing approval or commercialize the product candidates it develops, including:

 

   

regulators, or institutional review boards, or IRBs, or other reviewing bodies may not authorize Cerevel or its investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;

 

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it may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

 

   

Cerevel may experience challenges or delays in recruiting principal investigators or study sites to lead its clinical trials;

 

   

the number of subjects or patients required for clinical trials of Cerevel’s product candidates may be larger than Cerevel anticipates, enrollment in these clinical trials may be insufficient or slower than Cerevel anticipates, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than it anticipates;

 

   

its third-party contractors, including those manufacturing its product candidates or conducting clinical trials on its behalf, may fail to comply with regulatory requirements or meet their contractual obligations to Cerevel in a timely manner, or at all;

 

   

Cerevel may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance, which it may be required to resubmit to an IRB and regulatory authorities for re-examination;

 

   

regulators or other reviewing bodies may find deficiencies with, fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which Cerevel enter into agreement for clinical and commercial supplies, or the supply or quality of any product candidate or other materials necessary to conduct clinical trials of Cerevel’s product candidates may be insufficient, inadequate or not available at an acceptable cost, or it may experience interruptions in supply; and

 

   

the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering Cerevel’s clinical data insufficient for approval.

Regulators or IRBs of the institutions in which clinical trials are being conducted may suspend, limit or terminate a clinical trial, or data monitoring committees may recommend that Cerevel suspend or terminate a clinical trial, due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or its clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Negative or inconclusive results from Cerevel’s clinical trials or preclinical studies could mandate repeated or additional clinical trials and, to the extent it chooses to conduct clinical trials in other indications, could result in changes to or delays in clinical trials of Cerevel’s product candidates in such other indications. Cerevel does not know whether any clinical trials that it conducts will demonstrate adequate efficacy and safety to result in regulatory approval to market Cerevel’s product candidates for the indications that Cerevel is pursuing. If later-stage clinical trials do not produce favorable results, Cerevel’s ability to obtain regulatory approval for Cerevel’s product candidates will be adversely impacted.

Cerevel’s failure to successfully initiate and complete clinical trials and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market Cerevel’s product candidates would significantly harm its business. Cerevel’s product candidate development costs will also increase if it experiences delays in testing or regulatory approvals and Cerevel may be required to obtain additional funds to complete clinical trials. Cerevel cannot assure you that its clinical trials will begin as planned or be completed on schedule, if at all, or that it will not need to restructure or otherwise modify its trials after they have begun. Significant clinical trial delays also could shorten any periods during which Cerevel may have the exclusive right to commercialize Cerevel’s product candidates or allow its competitors to bring products to market before Cerevel does and impair its ability to successfully commercialize Cerevel’s product candidates, which may harm its business and results of operations. In addition, many of the factors that cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of Cerevel’s product candidates.

 

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Even if Cerevel completes the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and uncertain and may prevent Cerevel from obtaining approvals for the commercialization of Cerevel’s product candidates.

Any product candidate Cerevel develops and the activities associated with its development and commercialization, including its design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities in the United States and by comparable authorities in other countries. Failure to obtain marketing approval for a product candidate will prevent Cerevel from commercializing the product candidate in a given jurisdiction. Cerevel has not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that none of the product candidates Cerevel is developing or may seek to develop in the future will ever obtain regulatory approval. Cerevel has no experience in submitting and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs or regulatory consultants to assist Cerevel in this process. Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Any product candidates Cerevel develops may not be effective, may be only moderately effective, or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude its obtaining marketing approval or prevent or limit commercial use.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. The FDA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that Cerevel’s data are insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit, or prevent marketing approval of a product candidate. Any marketing approval that Cerevel may ultimately obtain could be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

If Cerevel experiences delays in obtaining approval or if Cerevel fails to obtain approval of any product candidates it may develop, the commercial prospects for those product candidates may be harmed, and its ability to generate revenues will be materially impaired.

Interim topline and preliminary data from Cerevel’s clinical trials that it announces or publishes from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, Cerevel may publish interim topline or preliminary data from its clinical trials. Interim data from clinical trials that Cerevel may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data Cerevel previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm its reputation and business prospects.

 

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If Cerevel does not achieve its projected development and commercialization goals in the timeframes Cerevel announces and expects, the development and commercialization of Cerevel’s product candidates may be delayed, and its business and results of operations may be harmed.

For planning purposes, Cerevel sometimes estimates the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives. These milestones may include its expectations regarding the commencement or completion of scientific studies and clinical trials, the submission of regulatory filings, or commercialization objectives. From time to time, Cerevel may publicly announce the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical programs, receipt of marketing approval or a commercial launch of a product. The achievement of many of these milestones may be outside of Cerevel’s control. All of these milestones are based on a variety of assumptions which, if not realized as expected, may cause the timing of achievement of the milestones to vary considerably from Cerevel’s estimates, including:

 

   

its available capital resources or capital constraints Cerevel experiences;

 

   

the rate of progress, costs and results of its clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators;

 

   

its ability to identify and enroll patients who meet clinical trial eligibility criteria;

 

   

its receipt of approvals by the FDA and other regulatory authorities and the timing thereof;

 

   

other actions, decisions or rules issued by regulators;

 

   

its ability to access sufficient, reliable and affordable supplies of materials used in the manufacture of Cerevel’s product candidates;

 

   

the efforts of its collaborators with respect to the commercialization of Cerevel’s product candidates; and

 

   

the securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.

If Cerevel fails to achieve announced milestones in the timeframes it expects, the development and commercialization of Cerevel’s product candidates may be delayed, and its business and results of operations may be harmed.

Cerevel may be subject to additional risks because Cerevel intends to evaluate its product candidates in combination with other compounds.

Cerevel intends to evaluate Cerevel’s product candidates in combination with other compounds. The use of Cerevel’s product candidates in combination with other compounds may subject Cerevel to risks that it would not face if Cerevel’s product candidates were being administered as a monotherapy. For instance, in its Phase 3 late-stage Parkinson’s trial, Cerevel intends to evaluate tavapadon in combination with L-dopa for the treatment of late-stage Parkinson’s, and L-dopa’s safety issues may be improperly attributed to tavapadon or the administration of tavapadon with L-dopa may result in safety issues that such other therapies or tavapadon would not have when used alone. The outcome and cost of developing a product candidate to be used with other compounds is difficult to predict and dependent on a number of factors that are outside Cerevel’s control. If Cerevel experiences efficacy or safety issues in its clinical trials in which Cerevel’s product candidates are being administered with other compounds, Cerevel may not receive regulatory approval for Cerevel’s product candidates, which could prevent Cerevel from ever generating revenue or achieving profitability.

 

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If Cerevel encounters difficulties enrolling patients in its clinical trials, its clinical development activities could be delayed or otherwise adversely affected.

Cerevel may experience difficulties in patient enrollment in its clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on Cerevel’s ability to enroll a sufficient number of patients who remain in the study until its conclusion.

Patient enrollment is affected by many factors, including:

 

   

the effects of COVID-19 on Cerevel’s ability to recruit and retain patients, including as a result of potential heightened exposure to COVID-19, prioritization of hospital resources toward the outbreak and unwillingness by patients to enroll or comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services;

 

   

the patient eligibility criteria defined in the protocol;

 

   

the size of the patient population required for analysis of the trial’s primary endpoints;

 

   

the proximity of patients to study sites;

 

   

the design of the trial;

 

   

Cerevel’s ability to recruit clinical trial investigators with the appropriate competencies and experience;

 

   

competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications that Cerevel is investigating;

 

   

Cerevel’s ability to obtain and maintain patient consents; and

 

   

the risk that patients enrolled in clinical trials will drop out of the trials before completion.

Because certain of the prior clinical trials of Cerevel’s product candidates were terminated prior to the conclusion of the trial, Cerevel may experience challenges in recruiting principal investigators and patients to participate in ongoing and future clinical trials for such product candidates if it is unable to sufficiently demonstrate the potential of such product candidates to them. In addition, Cerevel’s clinical trials may compete with other clinical trials for product candidates that are in the same therapeutic areas as Cerevel’s product candidates, and this competition will reduce the number and types of patients available to Cerevel, because some patients who might have opted to enroll in its trials may instead opt to enroll in a trial being conducted by one of its competitors. Since the number of qualified clinical investigators is limited, Cerevel may conduct some of its clinical trials at the same clinical trial sites that some of its competitors use, which will reduce the number of patients who are available for its clinical trials in such clinical trial site. Furthermore, if significant adverse events or other side effects are observed in any of its clinical trials, Cerevel may have difficulty recruiting patients to its trials and patients may drop out of its trials.

Cerevel’s inability to enroll a sufficient number of patients for its clinical trials would result in significant delays or might require Cerevel to abandon one or more clinical trials or its development efforts altogether. Delays in patient enrollment may result in increased costs, affect the timing or outcome of the planned clinical trials, product candidate development and approval process and jeopardize its ability to seek and obtain the regulatory approval required to commence product sales and generate revenue, which could prevent completion of these trials, adversely affect Cerevel’s ability to advance the development of Cerevel’s product candidates, cause the value of the company to decline and limit its ability to obtain additional financing if needed.

Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.

As product candidates proceed through preclinical studies to late-stage clinical trials towards potential approval and commercialization, it is common that various aspects of the development program, such as

 

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manufacturing methods and formulation, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause Cerevel’s product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the materials manufactured using altered processes. Such changes may also require additional testing, FDA notification or FDA approval. This could delay or prevent completion of clinical trials, require conducting bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay or prevent approval of Cerevel’s product candidates and jeopardize its ability to commence sales and generate revenue.

Cerevel’s product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained.

Undesirable side effects caused by any of Cerevel’s product candidates could cause Cerevel or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. In Cerevel’s planned and future clinical trials of Cerevel’s product candidates, it may observe a more unfavorable safety and tolerability profile than was observed in earlier-stage testing of these candidates.

Undesirable side effects have been observed in Cerevel’s product candidates to date. For example, in clinical trials of tavapadon, a dose-dependent increase in the frequency of nausea and headache was observed, with nausea, vomiting, dyskinesia, fall, fatigue, sleep disorder and tremors being the most common adverse events leading to discontinuation of tavapadon. In clinical trials of CVL-231, some moderate treatment-emergent increases in heart rate and blood pressure were observed following single doses of CVL-231 (>10 mg), which may be due to CVL-231’s activity on the M4 receptor subtype and its subsequent reduction of striatal dopamine levels. Cerevel may also observe additional safety or tolerability issues with Cerevel’s product candidates in ongoing or future clinical trials. Many compounds that initially showed promise in clinical or earlier-stage testing are later found to cause undesirable or unexpected side effects that prevented further development of the compound. Results of future clinical trials of Cerevel’s product candidates could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics, despite a favorable tolerability profile observed in earlier-stage testing.

If unacceptable side effects arise in the development of Cerevel’s product candidates, Cerevel, the FDA or comparable foreign regulatory authorities, the IRBs, or independent ethics committees at the institutions in which its trials are conducted, could suspend, limit or terminate its clinical trials, or the independent safety monitoring committee could recommend that Cerevel suspend, limit or terminate its trials, or the FDA or comparable foreign regulatory authorities could order Cerevel to cease clinical trials or deny approval of Cerevel’s product candidates for any or all targeted indications. Treatment-emergent side effects that are deemed to be drug-related could delay recruitment of clinical trial subjects or may cause subjects that enroll in its clinical trials to discontinue participation in its clinical trials. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. Cerevel may need to train medical personnel using Cerevel’s product candidates to understand the side effect profiles for its clinical trials and upon any commercialization of any of Cerevel’s product candidates. Inadequate training in recognizing or managing the potential side effects of Cerevel’s product candidates could result in harm to patients that are administered Cerevel’s product candidates. Any of these occurrences may adversely affect Cerevel’s business, financial condition and prospects significantly.

Moreover, clinical trials of Cerevel’s product candidates are conducted in carefully defined sets of patients who have agreed to enter into clinical trials. Consequently, it is possible that its clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects.

 

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Cerevel has concentrated its research and development efforts on the treatment of disorders of the brain and nervous system, a field that faces certain challenges in drug development.

Cerevel has focused its research and development efforts on addressing disorders of the brain and nervous system. Efforts by pharmaceutical companies in this field have faced certain challenges in drug development. In particular, many neuroscience diseases such as anxiety, schizophrenia or dementia-related apathy rely on subjective patient-reported outcomes as key endpoints. This makes them more difficult to evaluate than indications with more objective endpoints. Furthermore, these indications are often subject to a placebo effect, which may make it more challenging to isolate the beneficial effects of Cerevel’s product candidates. There can be no guarantee that Cerevel will successfully overcome these challenges with Cerevel’s product candidates or that it will not encounter other challenges in the development of Cerevel’s product candidates.

Even if any of Cerevel’s product candidates receives regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, in which case Cerevel may not generate significant revenues or become profitable.

Cerevel has never commercialized a product, and even if any of Cerevel’s product candidates is approved by the appropriate regulatory authorities for marketing and sale, it may nonetheless fail to achieve sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. Many of the indications for Cerevel’s product candidates have well-established standards of care that physicians, patients and payors are familiar with and, in some cases, are available generically. Even if Cerevel’s product candidates are successful in registrational clinical trials, they may not be successful in displacing these current standards of care if Cerevel is unable to demonstrate superior efficacy, safety, ease of administration and/or cost-effectiveness. For example, physicians may be reluctant to take their patients off their current medications and switch their treatment regimen to Cerevel’s product candidates. Further, patients often acclimate to the treatment regimen that they are currently taking and do not want to switch unless their physicians recommend switching products or they are required to switch due to lack of coverage and adequate reimbursement. Even if Cerevel is able to demonstrate Cerevel’s product candidates’ safety and efficacy to the FDA and other regulators, safety or efficacy concerns in the medical community may hinder market acceptance.

Efforts to educate the medical community and third-party payors on the benefits of Cerevel’s product candidates may require significant resources, including management time and financial resources, and may not be successful. For example, even if tavapadon ultimately receives regulatory approval, Cerevel may have difficulty in convincing the medical community that tavapadon’s selective dopamine D1/D5 partial agonism has the potential to deliver promising therapeutic benefits. If any product candidate is approved but does not achieve an adequate level of market acceptance, Cerevel may not generate significant revenues and it may not become profitable. The degree of market acceptance of Cerevel’s product candidates, if approved for commercial sale, will depend on a number of factors, including:

 

   

the efficacy and safety of the product;

 

   

the potential advantages of the product compared to competitive therapies;

 

   

the prevalence and severity of any side effects;

 

   

whether the product is designated under physician treatment guidelines as a first-, second- or third-line therapy;

 

   

Cerevel’s ability, or the ability of any future collaborators, to offer the product for sale at competitive prices;

 

   

the product’s convenience and ease of administration compared to alternative treatments;

 

   

the willingness of the target patient population to try, and of physicians to prescribe, the product;

 

   

limitations or warnings, including distribution or use restrictions contained in the product’s approved labeling;

 

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the strength of sales, marketing and distribution support;

 

   

changes in the standard of care for the targeted indications for the product; and

 

   

availability and adequacy of coverage and reimbursement from government payors, managed care plans and other third-party payors.

Any failure by one or more of Cerevel’s product candidates that obtains regulatory approval to achieve market acceptance or commercial success would adversely affect its business prospects.

If Cerevel fails to discover, develop and commercialize other product candidates, Cerevel may be unable to grow its business and Cerevel’s ability to achieve its strategic objectives would be impaired.

Although the development and commercialization of its current product candidates are Cerevel’s initial focus, as part of its longer-term growth strategy, Cerevel plans to develop other product candidates. In addition to the product candidates in its clinical-stage pipeline, Cerevel has in-licensed additional assets that are in earlier stages of development. Cerevel intends to evaluate internal opportunities from its existing product candidates or other potential product candidates, and also may choose to in-license or acquire other product candidates to treat patients suffering from other disorders with significant unmet medical needs and limited treatment options. These other potential product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and applicable foreign regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, Cerevel cannot assure you that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives.

In addition, Cerevel intends to devote substantial capital and resources for basic research to discover and identify additional product candidates. These research programs require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. Cerevel’s research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following:

 

   

the research methodology used may not be successful in identifying potential product candidates;

 

   

competitors may develop alternatives that render Cerevel’s product candidates obsolete;

 

   

product candidates that Cerevel develops may nevertheless be covered by third parties’ patents or other exclusive rights;

 

   

a product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

 

   

a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

 

   

a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.

In the future, Cerevel may also seek to in-license or acquire product candidates or the underlying technology. The process of proposing, negotiating and implementing a license or acquisition is lengthy and complex. Other companies, including some with substantially greater financial, marketing and sales resources, may compete with Cerevel for the license or acquisition of product candidates. Cerevel has limited resources to identify and execute the acquisition or in-licensing of third-party products, businesses and technologies and integrate them into its current infrastructure. Moreover, Cerevel may devote resources to potential acquisitions or

 

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in-licensing opportunities that are never completed, or it may fail to realize the anticipated benefits of such efforts. Cerevel may not be able to acquire the rights to additional product candidates on terms that Cerevel finds acceptable, or at all.

In addition, future acquisitions may entail numerous operational and financial risks, including:

 

   

exposure to unknown liabilities;

 

   

disruption of Cerevel’s business and diversion of its management’s time and attention to develop acquired products or technologies;

 

   

incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;

 

   

higher than expected acquisition and integration costs;

 

   

difficulty in combining the operations and personnel of any acquired businesses with Cerevel’s operations and personnel;

 

   

increased amortization expenses;

 

   

impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and

 

   

inability to motivate key employees of any acquired businesses.

If Cerevel is unsuccessful in identifying and developing additional product candidates, either through internal development or licensing or acquisition from third parties, its potential for growth and achieving its strategic objectives may be impaired.

The number of patients with the diseases and disorders for which Cerevel are developing its product candidates has not been established with precision. If the actual number of patients with the diseases or disorders Cerevel elects to pursue with Cerevel’s product candidates is smaller than Cerevel anticipates, Cerevel may have difficulties in enrolling patients in its clinical trials which may delay or prevent development of Cerevel’s product candidates. Even if such product candidates are successfully developed and approved, the markets for its products may be smaller than Cerevel expects and its revenue potential and ability to achieve profitability may be materially adversely affected.

Cerevel’s pipeline includes product candidates for a variety of neurological indications. There is no precise method of establishing the actual number of patients with any of these disorders in any geography over any time period. With respect to many of the indications in which Cerevel has developed, are developing, or plan to develop Cerevel’s product candidates, Cerevel has estimates of the prevalence of the disease or disorder. Cerevel’s estimates as to prevalence may not be accurate, and the actual prevalence or addressable patient population for some or all of those indications, or any other indication that Cerevel elect to pursue, may be significantly smaller than its estimates. In estimating the potential prevalence of indications Cerevel is pursuing, or may in the future pursue, including its estimates as to the prevalence of Parkinson’s, epilepsy and schizophrenia, Cerevel applies assumptions to available information that may not prove to be accurate. In each case, there is a range of estimates in the published literature and in marketing studies which include estimates within the range that are lower than its estimates. The actual number of patients with these disease indications may, however, be significantly lower than Cerevel believes. Even if its prevalence estimates are correct, Cerevel’s product candidates may be developed for only a subset of patients with the relevant disease or disorder or its products, if approved, may be indicated for or used by only a subset. Moreover, certain of Cerevel’s product candidates are being developed for indications that are novel. In the event the number of patients with the diseases and disorders Cerevel is studying is significantly lower than it expects, Cerevel may have difficulties in enrolling patients in its clinical trials which may delay or prevent development of Cerevel’s product candidates. If any of Cerevel’s product candidates are approved and its prevalence estimates with respect to any

 

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indication or its other market assumptions are not accurate, the markets for Cerevel’s product candidates for these indications may be smaller than Cerevel anticipates, which could limit Cerevel’s revenues and its ability to achieve profitability or to meet its expectations with respect to revenues or profits.

Competitive products may reduce or eliminate the commercial opportunity for Cerevel’s product candidates, if approved. If its competitors develop technologies or product candidates more rapidly than Cerevel does, or their technologies or product candidates are more effective or safer than Cerevel’s, its ability to develop and successfully commercialize Cerevel’s product candidates may be adversely affected.

The clinical and commercial landscapes for the treatment of neurological disorders are highly competitive and subject to rapid and significant technological change. Cerevel faces competition with respect to its indications for Cerevel’s product candidates and will face competition with respect to any other drug candidates that Cerevel may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell drugs or are pursuing the development of drug candidates for the treatment of the indications that Cerevel is pursuing. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

Cerevel believes that a significant number of product candidates are currently under development for the same indications Cerevel is currently pursuing, and some or all may become commercially available in the future for the treatment of conditions for which Cerevel is trying or may try to develop product candidates. Cerevel’s potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions. See the section entitled “Information About Cerevel—Competition” for examples of the competition that Cerevel’s product candidates face.

In many cases, Cerevel does not currently plan to run head-to-head clinical trials evaluating Cerevel’s product candidates against the current standards of care, which may make it more challenging for Cerevel’s product candidates to compete against the current standards of care due to the lack of head-to-head clinical trial data.

Cerevel’s competitors may have significantly greater financial resources, established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than Cerevel does. Accordingly, its competitors may be more successful than Cerevel may be in obtaining regulatory approval for therapies and achieving widespread market acceptance. Cerevel’s competitors’ products may be more effective, or more effectively marketed and sold, than any product candidate Cerevel may commercialize and may render its therapies obsolete or non-competitive before Cerevel can recover development and commercialization expenses. If any of Cerevel’s product candidates, including tavapadon, is approved, it could compete with a range of therapeutic treatments that are in development. In addition, Cerevel’s competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective or less costly than tavapadon, its other product candidates or any other product candidates that Cerevel may develop, which could render its product candidates obsolete and noncompetitive.

If Cerevel obtains approval for any of Cerevel’s product candidates, Cerevel may face competition based on many different factors, including the efficacy, safety and tolerability of its products, the ease with which its products can be administered, the timing and scope of regulatory approvals for these products, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position. Existing and future competing products could present superior treatment alternatives, including being more effective, safer, less expensive or marketed and sold more effectively than any products Cerevel may develop.

 

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Competitive products may make any products Cerevel develops obsolete or noncompetitive before it recovers the expense of developing and commercializing Cerevel’s product candidates. Such competitors could also recruit its employees, which could negatively impact Cerevel’s level of expertise and its ability to execute its business plan.

In addition, Cerevel’s competitors may obtain patent protection, regulatory exclusivities or FDA approval and commercialize products more rapidly than Cerevel does, which may impact future approvals or sales of any of Cerevel’s product candidates that receive regulatory approval. If the FDA approves the commercial sale of tavapadon or any other product candidate, Cerevel will also be competing with respect to marketing capabilities and manufacturing efficiency. Cerevel expects competition among products will be based on product efficacy and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capabilities, product price, reimbursement coverage by government and private third-party payors, regulatory exclusivities and patent position. Cerevel’s profitability and financial position will suffer if Cerevel’s product candidates receive regulatory approval but cannot compete effectively in the marketplace.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of its competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with Cerevel in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites, as well as in acquiring technologies complementary to, or necessary for, its programs.

If Cerevel is unable to develop its sales, marketing and distribution capability on its own or through collaborations with marketing partners, it will not be successful in commercializing Cerevel’s product candidates.

Cerevel currently has no marketing, sales or distribution capabilities. Cerevel intends to establish a sales and marketing organization, either on its own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize tavapadon or one or more of its other product candidates that may receive regulatory approval in key territories. These efforts will require substantial additional resources, some or all of which may be incurred in advance of any approval of the product candidate. Any failure or delay in the development of Cerevel’s or third parties’ internal sales, marketing and distribution capabilities would adversely impact the commercialization of tavapadon, its other product candidates and other future product candidates.

Factors that may inhibit Cerevel’s efforts to commercialize Cerevel’s product candidates on its own include:

 

   

its inability to recruit and retain adequate numbers of effective sales and marketing personnel;

 

   

the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe any future products;

 

   

the lack of complementary products to be offered by sales personnel, which may put Cerevel at a competitive disadvantage relative to companies with more extensive product lines; and

 

   

unforeseen costs and expenses associated with creating an independent sales and marketing organization.

With respect to its existing and future product candidates, Cerevel may choose to collaborate with third parties that have direct sales forces and established distribution systems to serve as an alternative to its own sales force and distribution systems. Cerevel’s future product revenue may be lower than if it directly marketed or sold Cerevel’s product candidates, if approved. In addition, any revenue Cerevel receives will depend in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within its control. If Cerevel is not successful in commercializing any approved products, its future product revenue will suffer and Cerevel may incur significant additional losses.

 

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If Cerevel does not establish sales and marketing capabilities successfully, either on its own or in collaboration with third parties, Cerevel will not be successful in commercializing Cerevel’s product candidates.

Product liability lawsuits against Cerevel or any of its future collaborators could divert its resources and attention, cause Cerevel to incur substantial liabilities and limit commercialization of Cerevel’s product candidates.

Cerevel is exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing and use of pharmaceutical products. Currently, Cerevel has no products that have been approved for commercial sale; however, the use of Cerevel’s product candidates by Cerevel and any collaborators in clinical trials, and the sale of these product candidates, if approved, in the future, may expose Cerevel to liability claims. Cerevel faces an inherent risk of product liability lawsuits related to the use of Cerevel’s product candidates in patients and will face an even greater risk if product candidates are approved by regulatory authorities and introduced commercially. Product liability claims may be brought against Cerevel by participants enrolled in Cerevel’s clinical trials, patients, health care providers, pharmaceutical companies, its collaborators or others using, administering or selling any of its future approved products. If Cerevel cannot successfully defend itself against any such claims, Cerevel may incur substantial liabilities or be required to limit commercialization of Cerevel’s product candidates. Regardless of the merits or eventual outcome, liability claims may result in:

 

   

decreased demand for any of its future approved products;

 

   

injury to Cerevel’s reputation;

 

   

withdrawal of clinical trial participants;

 

   

termination of clinical trial sites or entire trial programs;

 

   

significant litigation costs;

 

   

substantial monetary awards to, or costly settlements with, patients or other claimants;

 

   

product recalls or a change in the indications for which they may be used;

 

   

loss of revenue;

 

   

diversion of management and scientific resources from Cerevel’s business operations; and

 

   

the inability to commercialize Cerevel’s product candidates.

Although the clinical trial process is designed to identify and assess potential side effects, clinical development does not always fully characterize the safety and efficacy profile of a new medicine, and it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If Cerevel’s product candidates were to cause adverse side effects during clinical trials or after approval, Cerevel may be exposed to substantial liabilities. Physicians and patients may not comply with any warnings that identify known potential adverse effects and patients who should not use Cerevel’s product candidates. If any of Cerevel’s product candidates are approved for commercial sale, Cerevel will be highly dependent upon consumer perceptions of Cerevel and the safety and quality of its products. Cerevel could be adversely affected if it is subject to negative publicity associated with illness or other adverse effects resulting from patients’ use or misuse of its products or any similar products distributed by other companies.

Although Cerevel maintains product liability insurance coverage consistent with industry norms, including clinical trial liability, this insurance may not fully cover potential liabilities that Cerevel may incur. The cost of any product liability litigation or other proceeding, even if resolved in its favor, could be substantial. Cerevel will need to increase its insurance coverage if Cerevel commercializes any product that receives regulatory approval. In addition, insurance coverage is becoming increasingly expensive. If Cerevel is unable to maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of Cerevel’s product candidates, which could harm Cerevel’s business, financial condition, results of operations and prospects.

 

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Cyber-attacks or other failures in Cerevel’s telecommunications or information technology systems, or those of its collaborators, CROs, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of its business operations.

Cerevel, its collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants utilize information technology, or IT, systems and networks to process, transmit and store electronic information in connection with its business activities. As use of digital technologies has increased, cyber incidents, including third parties gaining access to employee accounts using stolen or inferred credentials, computer malware, viruses, spamming, phishing attacks or other means, and deliberate attacks and attempts to gain unauthorized access to computer systems and networks, have increased in frequency and sophistication. These threats pose a risk to the security of Cerevel’s, its collaborators’, CROs’, third-party logistics providers’, distributors’ and other contractors’ and consultants’ systems and networks, and the confidentiality, availability and integrity of its data. There can be no assurance that Cerevel will be successful in preventing cyber-attacks or successfully mitigating their effects. Similarly, there can be no assurance that Cerevel’s collaborators, CROs, third-party logistics providers, distributors and other contractors and consultants will be successful in protecting its clinical and other data that is stored on their systems. Like other companies, Cerevel has on occasion experienced, and will continue to experience, threats to its data and systems, including malicious codes and viruses, phishing, business email compromise attacks or other cyber-attacks. For example, in 2020, Cerevel discovered a business email compromise caused by phishing, which led to the misappropriation of a portion of Cerevel’s funds in late 2019. Even though Cerevel has implemented remedial measures promptly following this incident and does not believe that it had a material adverse effect on Cerevel’s business, Cerevel cannot guarantee that its implemented remedial measures will prevent additional related, as well as unrelated, incidents. Any cyber-attack, data breach or destruction or loss of data could result in a violation of applicable U.S. and international privacy, data protection and other laws and subject Cerevel to litigation and governmental investigations and proceedings by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability. Further, Cerevel’s general liability insurance and corporate risk program may not cover all potential claims to which it is exposed and may not be adequate to indemnify Cerevel for all liability that may be imposed, which could have a material adverse effect on its business and prospects. For example, the loss of clinical trial data from completed or ongoing clinical trials for any of Cerevel’s product candidates could result in delays in its development and regulatory approval efforts and significantly increase its costs to recover or reproduce the data. In addition, Cerevel may suffer reputational harm or face litigation or adverse regulatory action as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection measures.

Our ability to use Cerevel’s net operating losses and research and development tax credits to offset future taxable income may be subject to certain limitations.

As of December 31, 2019, Cerevel had U.S. federal net operating loss carryforwards totaling $81.3 million, all of which have an indefinite carryforward period. As of December 31, 2019, Cerevel had state net operating loss carryforwards totaling $79.5 million which begin to expire in 2038 and 2039. As of December 31, 2019, Cerevel also had U.S. federal and state research and development tax credit carryforwards of $1.7 million and $0.2 million, respectively, which expire at various dates through 2039 for federal purposes and 2034 for state purposes. The net operating losses which are limited in life and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities. In addition, in general, under Sections 382 and 383 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses or tax credits, or NOLs or credits, to offset future taxable income or taxes. For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who own at least 5% of a corporation’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a specified testing period. Cerevel’s existing NOLs or credits may be subject to limitations arising from previous ownership changes, and if Cerevel undergoes an ownership change in connection with, or we undergo an ownership change following, the transactions contemplated hereby, our ability to utilize NOLs or credits could be further limited by Sections 382 and 383 of the Code. In addition, future changes in our stock ownership, many of which are outside of our control, could result in an ownership change under Sections 382 and 383 of the Code. Cerevel’s NOLs or credits

 

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may also be impaired under state law. Accordingly, we may not be able to utilize a material portion of its NOLs or credits. If we determine that an ownership change has occurred and our ability to use Cerevel’s historical NOLs or credits is materially limited, it would harm our future operating results by effectively increasing our future tax obligations. Section 382 and 383 of the Code would apply to all net operating loss and tax credit carryforwards, whether the carryforward period is indefinite or not.

Furthermore, our ability to utilize Cerevel’s historical NOLs or credits is conditioned upon us attaining profitability and generating U.S. federal and state taxable income. Cerevel is a clinical-stage biopharmaceutical company with a limited operating history. Cerevel has incurred significant net losses since its inception and anticipates that it will continue to incur significant losses for the foreseeable future; and therefore, we do not know whether or when we will generate the U.S. federal or state taxable income necessary to utilize Cerevel’s historical NOLs or credits that are subject to limitation by Sections 382 and 383 of the Code.

Comprehensive tax reform legislation could adversely affect our business and financial condition.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation that includes significant changes to the taxation of business entities. These changes include, among others, a permanent reduction to the corporate income tax rate. Notwithstanding the reduction in the corporate income tax rate, the overall impact of this tax reform is uncertain, and our business and financial condition could be adversely affected. The U.S. government in the future may enact additional legislation that affect the taxation of business entities, including with respect to the treatment of NOLs. This proxy statement/prospectus does not discuss any such tax legislation or the manner in which it might affect holders of New Cerevel Common Stock and New Cerevel public warrants. Holders of New Cerevel Common Stock and New Cerevel public warrants are urged to consult with their legal and tax advisors with respect to any such legislation and the potential tax consequences of holding New Cerevel Common Stock and New Cerevel public warrants.

Cerevel and its independent registered public accounting firm have identified a material weakness in its internal control over financial reporting. If Cerevel is unable to remedy this material weakness, or if Cerevel fails to establish and maintain effective internal controls, Cerevel may be unable to produce timely and accurate financial statements, and Cerevel may conclude that its internal control over financial reporting is not effective, which could adversely impact its investors’ confidence and Cerevel’s stock price.

In connection with the audit of its consolidated financial statements for the year ended December 31, 2019, Cerevel and its independent registered public accounting firm identified a material weakness in its internal control over financial reporting related to its cash disbursement process. Specifically, Cerevel’s cash disbursement process was not adequately designed to identify unauthorized payment requests. In 2020, Cerevel discovered a business email compromise caused by phishing, which led to the misappropriation of a portion of its funds in late 2019. Cerevel does not believe that this breach had a material adverse effect on its business, but a deficiency in its internal controls resulted in the inability to prevent and timely detect the unauthorized disbursement requests.

Cerevel has implemented and is continuing to implement measures designed to improve its internal control over financial reporting to remediate this material weakness, including continuing to evaluate cybersecurity risks, developing a priority list of critical information systems and designing and implementing control activities such as implementing additional security policies and processes, hiring and training additional personnel, strengthening supervisory reviews and further enhancing its processes and internal control documentation.

If Cerevel is unable to successfully remediate its existing or any future material weaknesses in its internal control over financial reporting, or if Cerevel identifies any additional material weaknesses, the accuracy and timing of its financial reporting may be adversely affected, Cerevel may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in its financial reporting, and Cerevel’s stock price may decline as a result. Cerevel also could become subject to investigations by Nasdaq, the SEC or other regulatory authorities.

 

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Cerevel does not anticipate paying any cash dividends on its capital stock in the foreseeable future. Accordingly, stockholders must rely on capital appreciation, if any, for any return on their investment.

Cerevel has never declared nor paid cash dividends on its capital stock. Cerevel currently plans to retain all of its future earnings, if any, to finance the operation, development and growth of its business. In addition, the terms of any future debt or credit agreements may preclude Cerevel from paying dividends. As a result, capital appreciation, if any, of its common stock will be your sole source of gain for the foreseeable future.

If Cerevel fails to maintain an effective system of internal control over financial reporting, Cerevel may not be able to accurately report its financial results or prevent fraud. As a result, stockholders could lose confidence in its financial and other public reporting, which would harm its business and the trading price of its common stock.

Effective internal controls over financial reporting are necessary for Cerevel to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause Cerevel to fail to meet its reporting obligations. In addition, any testing by Cerevel conducted in connection with Section 404 of the Sarbanes-Oxley Act of 2002, or any subsequent testing by its independent registered public accounting firm, may reveal deficiencies in Cerevel’s internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to its financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in Cerevel’s reported financial information, which could have a negative effect on the trading price of its common stock.

Cerevel will be required to disclose changes made in its internal controls and procedures on a quarterly basis and Cerevel’s management will be required to assess the effectiveness of these controls annually. However, for as long as Cerevel is an “emerging growth company” under the JOBS Act, its independent registered public accounting firm will not be required to attest to the effectiveness of its internal controls over financial reporting pursuant to Section 404. Cerevel could be an “emerging growth company” for up to five years. An independent assessment of the effectiveness of its internal controls over financial reporting could detect problems that its management’s assessment might not. Undetected material weaknesses in Cerevel’s internal controls over financial reporting could lead to financial statement restatements and require Cerevel to incur the expense of remediation.

Cerevel’s disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Upon completion of this transaction, Cerevel will become subject to certain reporting requirements of the Exchange Act. Cerevel’s disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by Cerevel in reports Cerevel file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Cerevel believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in its control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.

 

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Risks Related to the Business Combination and ARYA

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to the “ARYA,” “we,” “us” or “our” refers to ARYA prior to the Business Combination and to New Cerevel and its subsidiaries following the Business Combination.

Our Sponsor and our initial shareholders have entered into letter agreements with us to vote in favor of the Business Combination, regardless of how our public shareholders vote.

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, our Sponsor and each other initial shareholder, pursuant to the Sponsor Letter Agreement, has agreed, among other things, to vote all of their public shares and Class B ordinary shares in favor of all the proposals being presented at the extraordinary general meeting, including the Business Combination Proposal and the transactions contemplated thereby (including the Merger). As of the date of this proxy statement/prospectus, our initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units).

Neither the ARYA Board nor any committee thereof obtained a third-party valuation in determining whether or not to pursue the Business Combination.

Neither the ARYA Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that ARYA is paying for Cerevel is fair to ARYA from a financial point of view. Neither the ARYA Board nor any committee thereof obtained a third party valuation in connection with the Business Combination. In analyzing the Business Combination, the ARYA Board and management conducted due diligence on Cerevel and researched the industry in which Cerevel operates. The ARYA Board reviewed, among other things, financial due diligence materials prepared by professional advisors, including quality of earnings reports and tax due diligence reports, financial and market data information on selected comparable companies, the implied purchase price multiple of Cerevel and the financial terms set forth in the Business Combination Agreement, and concluded that the Business Combination was in the best interest of its shareholders. Accordingly, investors will be relying solely on the judgment of the ARYA Board and management in valuing Cerevel, and the ARYA Board and management may not have properly valued Cerevel’s business. The lack of a third-party valuation may also lead an increased number of shareholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination.

The COVID-19 pandemic triggered an economic crisis which may delay or prevent the consummation of the Business Combination.

In December 2019, a coronavirus (COVID-19) outbreak was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. Since being initially reported in China, the coronavirus has spread throughout the world and has resulted in unprecedented restrictions and limitations on operations of many businesses, educational institutions and governmental entities, including in the United States and Canada. Given the ongoing and dynamic nature of the COVID-19 crisis, it is difficult to predict the impact on the business of ARYA, Cerevel and New Cerevel, and there is no guarantee that efforts by ARYA, Cerevel and New Cerevel to address the adverse impact of COVID-19 will be effective. If ARYA or Cerevel are unable to recover from a business disruption on a timely basis, the Business Combination and New Cerevel’s business and financial conditions and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by the coronavirus pandemic, and become more costly. Each of ARYA and Cerevel may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

 

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Since the initial shareholders, including ARYA’s directors and executive officers, have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Cerevel is appropriate as our initial business combination. Such interests include that Sponsor, as well as our executive officers and directors, will lose their entire investment in us if our business combination is not completed.

When you consider the recommendation of the ARYA Board in favor of approval of the Business Combination Proposal, you should keep in mind that the initial shareholders, including ARYA’s directors and executive officers, have interests in such proposal that are different from, or in addition to (which may conflict with), those of ARYA shareholders and warrant holders generally.

These interests include, among other things, the interests listed below:

 

   

the fact that our initial shareholders have agreed not to redeem any Class A ordinary shares held by them in connection with a shareholder vote to approve a proposed initial business combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the 3,737,500 Class B ordinary shares currently owned by the initial shareholders and such securities will have a significantly higher value at the time of the Business Combination;

 

   

the fact that Sponsor paid $4,990,000 for its private placement units, and the Class A ordinary shares and private placement warrants underlying those units would be worthless if a business combination is not consummated by June 9, 2022 (unless such date is extended in accordance with the Existing Governing Documents);

 

   

the fact that the initial shareholders and ARYA’s other current officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if ARYA fails to complete an initial business combination by June 9, 2022;

 

   

the fact that the Amended and Restated Registration and Shareholder Rights Agreement will be entered into by the initial shareholders;

 

   

the fact that, at the option of the Sponsor, any amounts outstanding under any loan made by the Sponsor or any of its affiliates to ARYA in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A ordinary shares in connection with the consummation of the Business Combination;

 

   

the continued indemnification of ARYA’s directors and officers and the continuation of ARYA’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”);

 

   

the fact that the Sponsor and ARYA’s officers and directors will lose their entire investment in ARYA and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by June 9, 2022;

 

   

the fact that if the trust account is liquidated, including in the event ARYA is unable to complete an initial business combination by June 9, 2022, the Sponsor has agreed to indemnify ARYA to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which ARYA has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ARYA, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account; and

 

   

the fact that ARYA may be entitled to distribute or pay over funds held by ARYA outside the Trust Account to the Sponsor or any of its Affiliates prior to the Closing.

See “Business Combination Proposal—Interests of ARYA’s Directors and Executive Officers in the Business Combination” for additional information on interests of ARYA’s directors and executive officers.

 

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The personal and financial interests of the initial shareholders as well as ARYA’s directors and executive officers may have influenced their motivation in identifying and selecting Cerevel as business combination targets, completing an initial business combination with Cerevel and influencing the operation of the business following the initial business combination. In considering the recommendations of the ARYA Board to vote for the proposals, its shareholders should consider these interests.

The exercise of ARYA’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in ARYA’s shareholders’ best interest.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require ARYA to agree to amend the Business Combination Agreement, to consent to certain actions taken by Cerevel or to waive rights that ARYA is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of Cerevel’s business, a request by Cerevel to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Cerevel’s business and would entitle ARYA to terminate the Business Combination Agreement. In any of such circumstances, it would be at ARYA’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors may result in a conflict of interest on the part of such director(s) between what he or they may believe is best for ARYA and its shareholders and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, ARYA does not believe there will be any changes or waivers that ARYA’s directors and executive officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, ARYA will circulate a new or amended proxy statement/prospectus and resolicit ARYA’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

The Bain Investor and Pfizer will have significant influence over us after completion of the Business Combination.

Based on the assumptions discussed in “Business Combination Proposal—Ownership of New Cerevel,” upon the completion of the Business Combination, the Bain Investor and Pfizer, will own, collectively, approximately 68.57% of the outstanding New Cerevel Common Stock, assuming that none of ARYA’s outstanding public shares are redeemed in connection with the Business Combination or approximately 77.69% of the outstanding New Cerevel Common Stock, assuming that, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, all of ARYA’s outstanding public shares are redeemed in connection with the Business Combination. Furthermore, as discussed under “Business Combination Proposal—Related Agreements—Registration and Shareholder Rights Agreement,” so long as they own certain specified amounts of its equity securities, Bain Investor and Pfizer have certain rights to nominate New Cerevel’s directors. As long as such persons each own or control a significant percentage of outstanding voting power, they will have the ability to strongly influence all corporate actions requiring stockholder approval, including the election and removal of directors and the size of our board of directors, any amendment of our certificate of incorporation or bylaws, or the approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets. In addition, Bain Investor and Pfizer will have the right to designate directors pursuant to the Amended and Restated Registration and Shareholder Rights agreement. Some of these persons or entities may have interests different than yours. For example, because many of these stockholders purchased their shares at prices substantially below the price at which shares are being sold in this transaction and have held their shares for a longer period, they may be more interested in selling the company to an acquirer than other investors or they may want Cerevel to pursue strategies that deviate from the interests of other stockholders.

 

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As a “controlled company” within the meaning of Nasdaq listing standards, New Cerevel will qualify for exemptions from certain corporate governance requirements. New Cerevel has the opportunity to elect any of the exemptions afforded a controlled company.

Because the Bain Investor and Pfizer, together, will control more than a majority of the total voting power of the New Cerevel Common Stock following the consummation of the Business Combination, New Cerevel will be a “controlled company” within the meaning of Nasdaq listing standards. Under Nasdaq rules, a company of which more than 50% of the voting power is held by another person or group of persons acting together is a “controlled company” and may elect not to comply with the following Nasdaq rules regarding corporate governance:

 

   

the requirement that a majority of its board of directors consist of independent directors;

 

   

the requirement to have a nominating/corporate governance committee composed entirely of independent directors and a written charter addressing the committee’s purpose and responsibilities;

 

   

the requirement to have a compensation committee composed entirely of independent directors and a written charter addressing the committee’s purpose and responsibilities; and

 

   

the requirement of an annual performance evaluation of the nominating/corporate governance and compensation committees.

New Cerevel currently expects that immediately upon consummation of the Business Combination, seven (7) of its eight (8) directors will be independent directors, and it is expected that the New Cerevel Board will have an independent nominating committee and independent compensation committee. However, for as long as the “controlled company” exemption is available, the New Cerevel Board in the future may not consist of a majority of independent directors and may not have an independent nominating committee or compensation committee. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq rules regarding corporate governance.

The Registration and Shareholder Rights Agreement provides that the doctrine of corporate opportunity does not apply with respect to certain of our stockholders, directors, non-voting observers or certain of their affiliates who are not our or our subsidiaries’ full-time employees.

The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an opportunity using corporate resources or information obtained in their corporate capacity for their personal advantage, acquire an interest adverse to that of the corporation or acquire property that is reasonably incident to the present or prospective business of the corporation or in which the corporation has a present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation chooses not to pursue that opportunity. The doctrine of corporate opportunity is intended to preclude officers, directors or other fiduciaries from personally benefiting from opportunities that belong to the corporation.

Pursuant to the Registration and Shareholder Rights Agreement that we will enter into at Closing, to the fullest extent permitted by law, the doctrine of corporate opportunity and any analogous doctrine will not apply to (i) Bain Investor, Pfizer and the Perceptive Shareholders, (ii) any member of our board of directors, non-voting observer or any officer who is not our or our subsidiaries’ full-time employee or (iii) any affiliate, partner, advisory board member, director, officer, manager, member or shareholder of Bain Investor, Pfizer or the Perceptive Shareholders who is not our or our subsidiaries’ full-time employee (any such person listed in (i), (ii) or (iii) being referred to herein as an External Party). Therefore, we renounced any interest or expectancy in, or being offered an opportunity to participate in, business opportunities that are from time to time presented to any External Party.

As a result, the External Parties are not prohibited from operating or investing in competing businesses. We therefore may find ourselves in competition with the External Parties, and we may not have knowledge of, or be able to pursue, transactions that could potentially be beneficial to us. Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively impact our business or prospects.

 

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Subsequent to consummation of the Business Combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the share price of our securities, which could cause you to lose some or all of your investment.

We cannot assure you that the due diligence conducted in relation to Cerevel has identified all material issues or risks associated with Cerevel, its business or the industry in which it competes. As a result of these factors, we may incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or New Cerevel. Accordingly, any shareholders of ARYA who choose to remain New Cerevel stockholders following the Business Combination could suffer a reduction in the value of their shares and warrants. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the warrant agreement do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants will be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.

If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder will be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

 

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Our ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of key personnel of New Cerevel, some of whom may be from ARYA and Cerevel, and some of whom may join New Cerevel following the Business Combination. The loss of key personnel or the hiring of ineffective personnel after the Business Combination could negatively impact the operations and profitability of New Cerevel.

Our ability to successfully effect the Business Combination and be successful thereafter will be dependent upon the efforts of our key personnel. Although some of ARYA’s key personnel may remain with the target business in senior management or advisory positions following our business combination, we expect New Cerevel’s current management to remain in place. We cannot assure you that we will be successful in integrating and retaining such key personnel, or in identifying and recruiting additional key individuals we determine may be necessary following the Business Combination.

The unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what New Cerevel’s actual financial position or results of operations would have been.

The unaudited pro forma financial information in this proxy statement/prospectus is presented for illustrative purposes only and has been prepared based on a number of assumptions including, but not limited to, Cerevel being considered the accounting acquirer in the Business Combination, the debt obligations and the cash and cash equivalents of Cerevel at the Closing and the number of public shares that are redeemed in connection with the Business Combination. Accordingly, such pro forma financial information may not be indicative of our future operating or financial performance and our actual financial condition and results of operations may vary materially from our pro forma results of operations and balance sheet contained elsewhere in this proxy statement/prospectus, including as a result of such assumptions not being accurate. Additionally, the final acquisition accounting adjustments could differ materially from the unaudited pro forma adjustments presented in this proxy statement/prospectus. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also change the portion of the purchase consideration allocable to goodwill and could impact the operating results of New Cerevel following the Business Combination due to differences in the allocation of the purchase consideration, depreciation and amortization related to some of these assets and liabilities. The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the Business Combination. See “Unaudited Pro Forma Condensed Combined Financial Information.”

The ability of our public shareholders to exercise redemption rights with respect to a large number of our public shares may not allow us to complete the most desirable business combination or optimize the capital structure of New Cerevel.

At the time of entering into the Business Combination Agreement, we did not know how many shareholders may exercise their redemption rights, and therefore, we needed to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. The consummation of the Business Combination is conditioned upon, among other things, (i) the approval of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Business Combination Agreement having expired or been terminated; and (iii) the Aggregate Transaction Proceeds Condition. Therefore, unless these conditions are waived by the applicable parties to the Business Combination Agreement, the Business Combination Agreement could terminate and the Business Combination may not be consummated.

Sponsor, as well as Cerevel, our directors, executive officers, advisors and their affiliates may elect to purchase public shares prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our Class A ordinary shares.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, our initial shareholders, Cerevel and/or their

 

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directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our initial shareholders, Cerevel and/or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposal A, the Nasdaq Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter (ii) the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C the Governing Documents Proposal D and the Governing Documents Proposal E are approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (iii) otherwise limit the number of public shares electing to redeem and (iv) New Cerevel’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing.

Entering into any such arrangements may have a depressive effect on the ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he or she owns, either at or prior to the Business Combination.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved.

In addition, if such purchases are made, the public “float” of our public shares and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price in our initial public offering).

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter

 

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into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per share redemption amount received by public shareholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors. In order to protect the amounts held in the trust account, Sponsor has agreed to be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduces the amount of funds in the trust account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the trust account or to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, even in the event that an executed waiver is deemed to be unenforceable against a third party, Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether Sponsor has sufficient funds to satisfy its indemnity obligations and we have not asked Sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that Sponsor would be able to satisfy those obligations. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our public shareholders $10.00 per share (which was the offering price in our initial public offering).

If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board of directors may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

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If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons.

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the

 

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new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate the Business Combination, require substantial financial and management resources and increase the time and costs of completing a business combination.

The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies. Cerevel is not a publicly reporting company required to comply with Section 404 of the Sarbanes-Oxley Act and New Cerevel management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to New Cerevel after the Business Combination. If we are not able to implement the requirements of Section 404, including any additional requirements once we are no longer an emerging growth company, in a timely manner or with adequate compliance, we may not be able to assess whether its internal control over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of New Cerevel Common Stock. Additionally, once we are no longer an emerging growth company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.

The price of New Cerevel Common Stock and New Cerevel’s warrants may be volatile.

Upon consummation of the Business Combination, the price of New Cerevel Common Stock and New Cerevel’s warrants may fluctuate due to a variety of factors, including:

 

   

changes in the industries in which New Cerevel and its customers operate;

 

   

variations in its operating performance and the performance of its competitors in general;

 

   

material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy;

 

   

actual or anticipated fluctuations in New Cerevel’s quarterly or annual operating results;

 

   

publication of research reports by securities analysts about New Cerevel or its competitors or its industry;

 

   

the public’s reaction to New Cerevel’s press releases, its other public announcements and its filings with the SEC;

 

   

New Cerevel’s failure or the failure of its competitors to meet analysts’ projections or guidance that New Cerevel or its competitors may give to the market;

 

   

additions and departures of key personnel;

 

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changes in laws and regulations affecting its business;

 

   

commencement of, or involvement in, litigation involving New Cerevel;

 

   

changes in New Cerevel’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of shares of New Cerevel Common Stock available for public sale; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.

These market and industry factors may materially reduce the market price of New Cerevel Common Stock and New Cerevel’s warrants regardless of the operating performance of New Cerevel.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of New Cerevel Common Stock to drop significantly, even if New Cerevel’s business is doing well.

Sales of a substantial number of shares of New Cerevel Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New Cerevel Common Stock.

It is anticipated that, upon completion of the Business Combination, (i) the Cerevel Shareholders, including Bain Investor and Pfizer, will own, collectively, approximately 68.63% of the outstanding New Cerevel Common Stock, (ii) our initial shareholders will own approximately 3.32% of the outstanding New Cerevel Common Stock and (iii) the Perceptive PIPE Investor will own approximately 2.35% of the outstanding New Cerevel Common Stock, in each case, assuming that none of ARYA’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 77.75%, 3.77% and 2.67%, respectively, assuming that, without giving effect to the ARYA Shareholder Transaction Support Agreements entered into by certain public shareholders participating in the PIPE Financing, all of ARYA’s outstanding public shares are redeemed in connection with the Business Combination. These percentages (i) assume that 76,263,673 shares of New Cerevel Common Stock are issued to the holders of shares of common stock (including the holders of vested restricted stock units that will settle prior to completion of the Business Combination) and preferred stock of Cerevel at Closing, which would be the number of shares of New Cerevel Common Stock issued to these holders if Closing were to occur on September 30, 2020. The number of shares of New Cerevel Common Stock issued to the holders of shares of common stock and preferred stock of Cerevel at Closing will fluctuate based the number of shares underlying vested Cerevel options (and the exercise price of such options) and restricted stock units at Closing, but will in no event exceed 78,000,000 shares of New Cerevel Common Stock. Vested Cerevel options and restricted stock units are taken into account for purposes of allocating the implied $780,000,000 equity value of Cerevel among the holders of shares and vested equity awards of Cerevel, with the value allocable to such vested options being determined based on the treasury stock method; (ii) are based on 32,000,000 shares of New Cerevel Common Stock to be issued in the PIPE Financing or deemed issued in connection with any pre-funding by Bain Investor pursuant to its Subscription Agreement; (iii) do not take into account any exercise of public warrants or private placement warrants to purchase New Cerevel Common Stock that will be outstanding immediately following Closing; (iv) do not take into account any shares of New Cerevel Common Stock underlying vested and unvested options that will be held by equityholders of Cerevel immediately following Closing; and (v) do not take into account any shares of New Cerevel Common Stock underlying unvested restricted stock units held by equityholders of Cerevel immediately following Closing. If the actual facts are different than these assumptions, the ownership percentages in New Cerevel will be different.

 

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Although the Perceptive Shareholders, the Bain Investor and Pfizer will be subject to certain restrictions regarding the transfer of New Cerevel Common Stock, these shares may be sold after the expiration of the respective applicable lock-up under the Amended and Restated Registration and Shareholder Rights Agreement. We intend to file one or more registration statements prior to or shortly after the closing of the Business Combination to provide for the resale of such shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of New Cerevel Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

The public stockholders will experience immediate dilution as a consequence of the issuance of New Cerevel Common Stock as consideration in the Business Combination and in the PIPE Financing.

In accordance with the terms and subject to the conditions of the Business Combination Agreement, at the Effective Time, (i) each share and vested equity award of Cerevel outstanding as of immediately prior to the Effective Time will be exchanged for shares of New Cerevel Common Stock or comparable vested equity awards that are settled or are exercisable for shares of New Cerevel Common stock, as applicable, based on an implied Cerevel vested equity value of $780,000,000 and (ii) all unvested equity awards of Cerevel will be exchanged for comparable unvested equity awards that are settled or exercisable for shares of New Cerevel Common Stock, as applicable, determined based on the same implied Cerevel vested equity value described in clause (i).

The issuance of additional common stock will significantly dilute the equity interests of existing holders of ARYA securities, and may adversely affect prevailing market prices for the New Cerevel Common Stock and/or the New Cerevel warrants.

Warrants will become exercisable for New Cerevel Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

If the Business Combination is completed, outstanding warrants to purchase an aggregate of 5,149,666 shares of New Cerevel Common Stock will become exercisable in accordance with the terms of the warrant agreement governing those securities. These warrants will become exercisable 30 days after the completion of the Business Combination. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of New Cerevel Common Stock will be issued, which will result in dilution to the holders of New Cerevel Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of New Cerevel Common Stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. See “ —Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.”

Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.

The warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and ARYA. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or correct any mistake, but requires the approval by the holders of at least 50% of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with

 

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respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of New Cerevel Common Stock purchasable upon exercise of a warrant.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the New Cerevel Common Stock equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to: (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants.

In addition, we may redeem your warrants at any time after they become exercisable and prior to their expiration at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares.

The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.365 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants. None of the private placement warrants will be redeemable by us, subject to certain circumstances, so long as they are held by our sponsor or its permitted transferees.

The Nasdaq may not list New Cerevel’s securities on its exchange, which could limit investors’ ability to make transactions in New Cerevel’s securities and subject New Cerevel to additional trading restrictions.

An active trading market for New Cerevel’s securities following the Business Combination may never develop or, if developed, it may not be sustained. In connection with the Business Combination, in order to continue to maintain the listing of our securities on Nasdaq, we will be required to demonstrate compliance with Nasdaq’s listing requirements. We will apply to have New Cerevel’s securities listed on Nasdaq upon consummation of the Business Combination. We cannot assure you that we will be able to meet all listing requirements. Even if New Cerevel’s securities are listed on Nasdaq, New Cerevel may be unable to maintain the listing of its securities in the future.

If New Cerevel fails to meet the listing requirements and Nasdaq does not list its securities on its exchange, Cerevel would not be required to consummate the Business Combination. In the event that Cerevel elected to waive this condition, and the Business Combination was consummated without New Cerevel’s securities being listed on the Nasdaq or on another national securities exchange, New Cerevel could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for New Cerevel’s securities;

 

   

reduced liquidity for New Cerevel’s securities;

 

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a determination that New Cerevel Common Stock is a “penny stock” which will require brokers trading in New Cerevel Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New Cerevel’s securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If New Cerevel’s securities were not listed on Nasdaq, such securities would not qualify as covered securities and we would be subject to regulation in each state in which we offer our securities because states are not preempted from regulating the sale of securities that are not covered securities.

Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common shares.

Securities research analysts may establish and publish their own periodic projections for New Cerevel following consummation of the Business Combination. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. While we expect research analyst coverage following consummation of the Business Combination, if no analysts commence coverage of us, the market price and volume for our common shares could be adversely affected.

We are subject to and New Cerevel will be subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both ARYA’s costs and the risk of non-compliance and will increase both New Cerevel’s costs and the risk of non-compliance.

We are and New Cerevel will be subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and New Cerevel’s efforts to comply likely will result in, increased general and administrative expenses and a diversion of management time and attention from seeking a business combination target.

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to New Cerevel’s disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

Risks Related to the Consummation of the Domestication

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “we,” “us” or “our” refers to ARYA prior to the Business Combination and to New Cerevel and its subsidiaries following the Business Combination.

The Domestication may result in adverse tax consequences for holders of public shares.

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to the redemption of New Cerevel Common Stock, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. Additionally, non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations—Non-U.S. Holders” below) may become subject to withholding tax on any dividends paid or deemed paid on shares of New Cerevel Common Stock after the Domestication.

As discussed more fully under “U.S. Federal Income Tax Considerations,” the Domestication generally should constitute a tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) to a statutory conversion of a corporation holding only investment-type assets such as ARYA, this result is not entirely clear. Accordingly, due to the absence of such guidance, it is not possible to predict whether the IRS or a court considering the issue would take a contrary position. If the Domestication fails to qualify as a reorganization under Section 368(a)(1)(F) of the Code, subject to the PFIC rules described in further detail below, a U.S. Holder generally would recognize gain or loss with respect to its public shares or public warrants in an amount equal to the difference, if any, between the fair market value of the corresponding shares of New Cerevel Common Stock or New Cerevel warrants received in the Domestication and the U.S. Holder’s adjusted tax basis in its public shares and public warrants surrendered in exchange therefor.

In the case of a transaction, such as the Domestication, that should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders will be subject to Section 367(b) of the Code and, as a result: a U.S. Holder who on the day of the Domestication beneficially owns (actually and constructively) public shares with a fair market value of less than $50,000 on the date of the Domestication generally will not recognize any gain or loss and will not be required to include any part of ARYA’s earnings in income in respect of the Domestication; a U.S. Holder who on the day of the Domestication beneficially owns (actually and constructively) public shares with a fair market value of $50,000 or more, but less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% or more of the total value of all classes of our stock, generally will recognize gain (but not loss) in respect of the Domestication as if such U.S. Holder exchanged its public shares for shares of New Cerevel Common Stock in a taxable transaction, unless such U.S. Holder elects in accordance with applicable Treasury Regulations to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to the public shares held directly by such U.S. Holder; and a U.S. Holder who on the day of the Domestication beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock, will generally be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to the public shares held directly by such U.S. Holder; however, any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (participation exemption).

Additionally, if ARYA were to be treated as a PFIC for U.S. federal income tax purposes, certain U.S. Holders may be subject to adverse tax consequences as a result of the Domestication. However, provided the Domestication is completed in 2020, ARYA believes that it is likely that it will not be classified as a PFIC because it will qualify for an exception to the PFIC rules known as the “start-up exception.” The requirement to qualify for the start-up exception and the potential application of the PFIC rules to the Domestication are discussed more fully under “U.S. Federal Income Tax Considerations—U.S. Holders—PFIC Considerations.

All holders are urged to consult their tax advisor for the tax consequences of the Domestication to their particular situation. For a more detailed description of the U.S. federal income tax consequences associated with the Domestication, see “U.S. Federal Income Tax Considerations.”

 

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Upon consummation of the Business Combination, the rights of holders of New Cerevel Common Stock arising under the DGCL as well as Proposed Governing Documents will differ from and may be less favorable to the rights of holders of Class A ordinary shares arising under Cayman Islands law as well as our current memorandum and articles of association.

Upon consummation of the Business Combination, the rights of holders of New Cerevel Common Stock will arise under the Proposed Governing Documents as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in the Existing Governing Documents and Cayman Islands law and, therefore, some rights of holders of New Cerevel Common Stock could differ from the rights that holders of Class A ordinary shares currently possess. For instance, while class actions are generally not available to shareholders under Cayman Islands law, such actions are generally available under the DGCL. This change could increase the likelihood that New Cerevel becomes involved in costly litigation, which could have a material adverse effect on New Cerevel.

In addition, there are differences between the Proposed Governing Documents of New Cerevel and the current constitutional documents of ARYA. For a more detailed description of the rights of holders of New Cerevel Common Stock and how they may differ from the rights of holders of Class A ordinary shares, please see “Comparison of Corporate Governance and Shareholder Rights.” The forms of the Proposed Certificate of Incorporation and the Proposed Bylaws of New Cerevel are attached as Annex C and Annex D, respectively, to this proxy statement/prospectus, and we urge you to read them.

Delaware law and New Cerevel’s Proposed Governing Documents contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

The Proposed Governing Documents that will be in effect upon consummation of the Business Combination, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the New Cerevel Board and therefore depress the trading price of New Cerevel Common Stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of the New Cerevel board of directors or taking other corporate actions, including effecting changes in our management. Among other things, the Proposed Governing Documents include provisions regarding:

 

   

the ability of the New Cerevel Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 

   

the limitation of the liability of, and the indemnification of, New Cerevel’s directors and officers;

 

   

a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders after such date and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors;

 

   

the requirement that a special meeting of stockholders may be called only by a majority of the entire New Cerevel Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;

 

   

controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;

 

   

the ability of the New Cerevel Board to amend the bylaws, which may allow the New Cerevel Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and

 

   

advance notice procedures with which stockholders must comply to nominate candidates to the New Cerevel Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay

 

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changes in the New Cerevel Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of New Cerevel.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the New Cerevel Board or management.

In addition, the Proposed Certificate of Incorporation includes a provision substantially similar to Section 203 of the DGCL, which may prohibit certain stockholders holding 15% or more of New Cerevel’s outstanding capital stock from engaging in certain business combinations with us for a specified period of time.

New Cerevel’s Proposed Certificate of Incorporation will designate a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between New Cerevel and its stockholders, which could limit New Cerevel’s stockholders’ ability to obtain a favorable judicial forum for disputes with New Cerevel or its directors, officers, stockholders, employees or agents.

The Proposed Certificate of Incorporation, which will be in effect upon consummation of the Business Combination, provides that, unless New Cerevel consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for state law claims for (i) any derivative action or proceeding brought on behalf of New Cerevel, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of New Cerevel to New Cerevel or New Cerevel’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the Proposed Certificate of Incorporation or Proposed Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of the Proposed Certificate of Incorporation or Proposed Bylaws, or (v) any action asserting a claim against New Cerevel governed by the internal affairs doctrine. The forgoing provisions will not apply to any claims arising under the Exchange Act or the Securities Act and, unless the Corporation consents in writing to the selection of an alternative forum, the United States District Court for the District of Massachusetts will be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act.

This choice of forum provision in our Proposed Certificate of Incorporation may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New Cerevel or any of New Cerevel’s directors, officers, or other employees, which may discourage lawsuits with respect to such claims. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find the choice of forum provision contained in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in an action, New Cerevel may incur additional costs associated with resolving such action in other jurisdictions, which could harm New Cerevel’s business, results of operations and financial condition.

Risks Related to the Redemption

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “we,” “us” or “our” refers to ARYA prior to the Business Combination and to New Cerevel and its subsidiaries following the Business Combination.

Public Shareholders who wish to redeem their public shares for a pro rata portion of the trust account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their public shares for a pro rata portion of the funds held in the trust account.

A public shareholder will be entitled to receive cash for any public shares to be redeemed only if such public shareholder: (i)(a) holds public shares, or (b) if the public shareholder holds public shares through units, the

 

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public shareholder elects to separate its units into the underlying public shares and public warrants prior to exercising its redemption rights with respect to the public shares; (ii) submits a written request to Continental, ARYA’s transfer agent, in which it (a) requests that New Cerevel redeem all or a portion of its public shares for cash, and (b) identifies itself as a beneficial holder of the public shares and provides its legal name, phone number and address; and (iii) delivers its public shares to Continental, ARYA’s transfer agent, physically or electronically through DTC. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on October 22, 2020 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. In order to obtain a physical share certificate, a shareholder’s broker and/or clearing broker, DTC and Continental, ARYA’s transfer agent, will need to act to facilitate this request. It is ARYA’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because ARYA does not have any control over this process or over DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, public shareholders who wish to redeem their public shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, ARYA’s transfer agent, New Cerevel will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering, calculated as of two business days prior to the consummation of the Business Combination. Please see the section entitled “Extraordinary General Meeting of ARYA—Redemption Rights” for additional information on how to exercise your redemption rights.

If a public shareholder fails to receive notice of ARYA’s offer to redeem public shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

If, despite ARYA’s compliance with the proxy rules, a public shareholder fails to receive ARYA’s proxy materials, such public shareholder may not become aware of the opportunity to redeem his, her or its public shares. In addition, the proxy materials that ARYA is furnishing to holders of public shares in connection with the Business Combination describes the various procedures that must be complied with in order to validly redeem the public shares. In the event that a public shareholder fails to comply with these procedures, its public shares may not be redeemed. Please see the section entitled “Extraordinary General Meeting of ARYA—Redemption Rights” for additional information on how to exercise your redemption rights.

ARYA does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete the Business Combination with which a substantial majority of ARYA’s shareholders do not agree.

The Existing Governing Documents do not provide a specified maximum redemption threshold, except that ARYA will not redeem public shares in an amount that would cause ARYA’s net tangible assets to be less than $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act).

As a result, ARYA may be able to complete the Business Combination even though a substantial portion of public shareholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to Sponsor, directors or officers or their affiliates. As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of public shares by ARYA or the persons described above have been entered into with any such investor or holder. ARYA will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

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If you or a “group” of shareholders of which you are a part are deemed to hold an aggregate of more than 15% of the public shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the public shares.

A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the public shares. In order to determine whether a shareholder is acting in concert or as a group with another shareholder, ARYA will require each public shareholder seeking to exercise redemption rights to certify to ARYA whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other public information relating to stock ownership available to ARYA at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which ARYA makes the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over ARYA’s ability to consummate the Business Combination and you could suffer a material loss on your investment in ARYA if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if ARYA consummates the Business Combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the public shares and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. ARYA cannot assure you that the value of such excess shares will appreciate over time following the Business Combination or that the market price of the public shares will exceed the per-share redemption price. Notwithstanding the foregoing, shareholders may challenge ARYA’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

However, ARYA’s shareholders’ ability to vote all of their shares (including such excess shares) for or against the Business Combination is not restricted by this limitation on redemption.

There is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the trust account will put the shareholder in a better future economic position.

ARYA can give no assurance as to the price at which a shareholder may be able to sell its public shares in the future following the completion of the Business Combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the Business Combination, may cause an increase in ARYA share price, and may result in a lower value realized now than a shareholder of ARYA might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a shareholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A shareholder should consult the shareholder’s own financial advisor for assistance on how this may affect his, her or its individual situation.

The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.

The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated memorandum and articles of association,

 

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our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of income taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest to pay dissolution expenses). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.

Risks if the Adjournment Proposal is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination and the Domestication, the ARYA Board will not have the ability to adjourn the extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved, and, therefore, the Business Combination may not be consummated.

The ARYA Board is seeking approval to adjourn the extraordinary general meeting to a later date or dates if, at the extraordinary general meeting, based upon the tabulated votes, there are insufficient votes to approve each of the Condition Precedent Proposals. If the Adjournment Proposal is not approved, the ARYA Board will not have the ability to adjourn the extraordinary general meeting to a later date and, therefore, will not have more time to solicit votes to approve the Condition Precedent Proposals. In such events, the Business Combination would not be completed.

Risks if the Domestication and the Business Combination are not Consummated

References in this section to “we,” “us” and “our” refer to ARYA.

If we are not able to complete the Business Combination with Cerevel nor able to complete another business combination by June 9, 2022, in each case, as such date may be extended pursuant to our Existing Governing Documents, we would cease all operations except for the purpose of winding up and we would redeem our Class A ordinary shares and liquidate the trust account, in which case our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

If we are not able to complete the Business Combination with Cerevel nor able to complete another business combination by June 9, 2022, in each case, as such date may be extended pursuant to our Existing Governing Documents we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest will be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or public warrants, potentially at a loss.

Our public shareholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of a business combination (including the closing of the Business Combination), and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in

 

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connection with a shareholder vote to amend the Existing Governing Documents (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with a business combination or to redeem 100% of our public shares if we do not complete our initial business combination by June 9, 2022 or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) the redemption of our public shares if we have not consummated an initial business by June 9, 2022, subject to applicable law and as further described herein. Public shareholders who redeem their public shares in connection with a shareholder vote described in clause (ii) in the preceding sentence will not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination by June 9, 2022, with respect to such public shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

If we do not consummate an initial business combination by June 9, 2022, our public shareholders may be forced to wait until after June 9, 2022 before redemption from the trust account.

If we are unable to consummate our initial business combination by June 9, 2022 (as such date may be extended pursuant to our Existing Governing Documents), we will distribute the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of the net interest earned thereon to pay dissolution expenses), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described in this proxy statement/prospectus. Any redemption of public shareholders from the trust account shall be affected automatically by function of the Existing Governing Documents prior to any voluntary winding up. If we are required to wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with Cayman Islands law. In that case, investors may be forced to wait beyond June 9, 2022 (as such date may be extended pursuant to our Existing Governing Documents), before the redemption proceeds of the trust account become available to them, and they receive the return of their pro rata portion of the proceeds from the trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our Existing Governing Documents, and only then in cases where investors have sought to redeem their public shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do not amend our Existing Governing Documents. Our Existing Governing Documents provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.

If the net proceeds of our initial public offering not being held in the trust account are insufficient to allow us to operate through June 9, 2022, and we are unable to obtain additional capital, we may be unable to complete our initial business combination, in which case our public shareholders may only receive $10.00 per share, and our warrants will expire worthless.

As of June 30, 2020, we had cash of approximately $1.3 million held outside the trust account, which is available for use by us to cover the costs associated with identifying a target business and negotiating a business combination and other general corporate uses. In addition, as of June 30, 2020, we had total current liabilities of approximately $405,778. The funds available to us outside of the trust account may not be sufficient to allow us to operate until June 9, 2022, assuming that our initial business combination is not completed during that time. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around

 

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for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.

If we are required to seek additional capital, we would need to borrow funds from Sponsor, members of our management team or other third parties to operate or may be forced to liquidate. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to obtain additional financing, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive approximately $10.00 per share on our redemption of the public shares and the public warrants will expire worthless.

 

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EXTRAORDINARY GENERAL MEETING OF ARYA

General

ARYA is furnishing this proxy statement/prospectus to ARYA’s shareholders as part of the solicitation of proxies by the ARYA Board for use at the extraordinary general meeting of ARYA to be held on October 26, 2020, and at any adjournment thereof. This proxy statement/prospectus is first being furnished to ARYA’s shareholders on or about October 9, 2020 in connection with the vote on the proposals described in this proxy statement/prospectus. This proxy statement/prospectus provides ARYA’s shareholders with information they need to know to be able to vote or instruct their vote to be cast at the extraordinary general meeting.

Date, Time and Place

The extraordinary general meeting will be held at 10:30 a.m., Eastern Time, on October 26, 2020 at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, unless the extraordinary general meeting is adjourned.

Purpose of the ARYA Extraordinary General Meeting

At the extraordinary general meeting, ARYA is asking holders of ordinary shares to consider and vote upon:

 

   

a proposal to approve by ordinary resolution and adopt the Business Combination Agreement, including the Merger, and the transactions contemplated thereby;

 

   

a proposal to approve by special resolution the Domestication;

 

   

the following five (5) separate proposals to approve by special resolution (unless otherwise noted) the following material differences between the Existing Governing Documents and the Proposed Governing Documents:

 

   

an ordinary resolution to authorize the change in the authorized share capital of ARYA from US$50,000 divided into (i) 479,000,000 Class A ordinary shares, par value $0.0001 per share, 20,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) 500,000,000 shares of New Cerevel Common Stock and 10,000,000 shares of New Cerevel Preferred Stock;

 

   

to authorize the New Cerevel Board to issue any or all shares of New Cerevel Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New Cerevel Board and as may be permitted by the DGCL;

 

   

to provide that certain provisions of the certificate of incorporation of New Cerevel are subject to the Amended and Restated Registration and Shareholder Rights Agreement;

 

   

to authorize the removal of the ability of New Cerevel stockholders to take action by written consent in lieu of a meeting; and

 

   

to amend and restate the Existing Governing Documents and authorize all other changes in connection with the replacement of Existing Governing Documents with the Proposed Governing Documents as part of the Domestication, including (i) changing the post-Business Combination corporate name from “ARYA Sciences Acquisition Corp II” to “Cerevel Therapeutics Holdings, Inc.” (which is expected to occur upon the effectiveness of the Domestication), (i) making New Cerevel’s corporate existence perpetual, (iii) adopting Delaware as the exclusive forum for certain stockholder litigation and the United States District Court for the District of Massachusetts as the exclusive forum for litigation arising out of the Securities Act, (iv) electing to not be governed by Section 203 of the DGCL and limiting certain corporate takeovers by interested stockholders and (v) removing certain provisions related to our status as a blank check company that will no longer

 

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be applicable upon consummation of the Business Combination, all of which the ARYA Board believes is necessary to adequately address the needs of New Cerevel after the Business Combination;

 

   

a proposal to approve by ordinary resolution shares of New Cerevel Common Stock issued in connection with the Business Combination and the PIPE Financing pursuant to Nasdaq Listing Rule 5635;

 

   

a proposal to approve and adopt by ordinary resolution the Incentive Equity Plan;

 

   

a proposal to approve and adopt by ordinary resolution the ESPP; and

 

   

a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to, among other things, permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting.

Each of the Business Combination Proposal, the Domestication Proposal, the Required Governing Documents Proposals, the Nasdaq Proposal and the Incentive Award Plan Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Governing Documents Proposals that are not Required Governing Documents Proposals and the Employee Stock Purchase Plan Proposal are conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on any other proposal.

Recommendation of the ARYA Board

The ARYA Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of ARYA and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Governing Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

The existence of financial and personal interests of one or more of ARYA’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of ARYA and its shareholders and what he or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, ARYA’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal—Interests of ARYA’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Record Date; Who is Entitled to Vote

ARYA shareholders holding shares in “street name” will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned ordinary shares at the close of business on September 4, 2020, which is the “record date” for the extraordinary general meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. Our warrants do not have voting rights. As of the close of business on the record date, there were 19,186,500 ordinary shares issued and outstanding, of which 14,950,000 were issued and outstanding public shares.

Quorum

A quorum of ARYA shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold not less than a majority of the

 

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issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 9,593,251 ordinary shares would be required to achieve a quorum.

Abstentions and Broker Non-Votes

Proxies that are marked “abstain” and proxies relating to “street name” shares that are returned to ARYA but marked by brokers as “not voted” will be treated as shares present for purposes of determining the presence of a quorum on all matters. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. If a shareholder does not give the broker voting instructions, under applicable self-regulatory organization rules, its broker may not vote its shares on “non-routine” proposals, such as the Business Combination Proposal or any of the other Condition Precedent Proposals.

Vote Required for Approval

The approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

The approval of the Domestication Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

The approval of each of the Governing Documents Proposals requires a special resolution under Cayman Islands law, being the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, save for Governing Documents Proposal A, which proposes to amend ARYA’s authorized share capital and which will require an ordinary resolution, being the affirmative vote of holders of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the Nasdaq Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

The approval of the Incentive Award Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

The approval of the Employee Stock Purchase Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting.

The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Each of the Business Combination Proposal, the Domestication Proposal, the Governing Documents Proposals, the Nasdaq Proposal and the Incentive Award Plan Proposal is conditioned on the approval and

 

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adoption of each of the other Condition Precedent Proposals. The Employee Stock Purchase Plan Proposal is conditioned on the approval of the Condition Precedent Proposals. The Adjournment Proposal is not conditioned on any other proposal.

Voting Your Shares

Each ordinary share that you own in your name entitles you to one vote. Your proxy card shows the number of ordinary shares that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

There are two ways to vote your ordinary shares at the extraordinary general meeting:

 

   

You can vote by signing and returning the enclosed proxy card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by the ARYA Board “FOR” the Business Combination Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Governing Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the Employee Stock Purchase Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting. Votes received after a matter has been voted upon at the extraordinary general meeting will not be counted.

 

   

You can attend the extraordinary general meeting and vote in person. You will receive a ballot when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a valid legal proxy from the broker, bank or other nominee. That is the only way ARYA can be sure that the broker, bank or nominee has not already voted your shares.

Revoking Your Proxy

If you are an ARYA shareholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify ARYA’s general counsel in writing before the extraordinary general meeting that you have revoked your proxy; or

 

   

you may attend the extraordinary general meeting, revoke your proxy, and vote in person, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you are a shareholder and have any questions about how to vote or direct a vote in respect of your ordinary shares, you may call Morrow, our proxy solicitor, by calling (800) 662-5200, or banks and brokers can call collect at (203) 658-9400, or by emailing ARYB.info@investor.morrowsodali.com.

Redemption Rights

In connection with the proposed Business Combination, pursuant to the Existing Governing Documents, a public shareholder may request of ARYA that New Cerevel redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

 

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  (ii)

submit a written request to Continental, ARYA’s transfer agent, in which you (i) request that New Cerevel redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

 

  (iii)

deliver your public shares to Continental, ARYA’s transfer agent, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on October 22, 2020 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, ARYA’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders (other than those who have agreed not to do so by executing an ARYA Shareholder Transaction Support Agreement) may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, ARYA’s transfer agent, New Cerevel will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of September 30, 2020, this would have amounted to approximately $10.005 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and accordingly it is shares of New Cerevel Common Stock that will be redeemed immediately after consummation of the Business Combination.

If you hold the shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. Shares of New Cerevel Common Stock that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through DTC’s DWAC system. The transfer agent will typically charge the tendering broker $80 and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the proposed business combination is not consummated this may result in an additional cost to shareholders for the return of their shares.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting. If you deliver your shares for redemption to Continental, our transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that our transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, our transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, our transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental, our agent, at least two business days prior to the vote at the extraordinary general meeting.

 

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Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The initial shareholders have, pursuant to the Sponsor Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting and waive their redemption rights with respect to such ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the initial shareholders own approximately 22.1% of the issued and outstanding ordinary shares. See “Business Combination Proposal—Related Agreements—Sponsor Letter Agreement” in the accompanying proxy statement/prospectus for more information related to the Sponsor Letter Agreement.

Holders of the warrants will not have redemption rights with respect to the warrants.

The closing price of public shares on September 30, 2020 was $10.45. For illustrative purposes, as of September 30, 2020, funds in the trust account plus accrued interest thereon totaled approximately $149,572,055 or $10.005 per issued and outstanding public share.

Prior to exercising redemption rights, public shareholders should verify the market price of the public shares as they may receive higher proceeds from the sale of their public shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. ARYA cannot assure its shareholders that they will be able to sell their public shares in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their shares.

Appraisal Rights

Neither our shareholders nor our warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

Proxy Solicitation Costs

ARYA is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone or in person. ARYA and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. ARYA will bear the cost of the solicitation.

ARYA has hired Morrow to assist in the proxy solicitation process. ARYA will pay that firm a fee of $22,500 plus disbursements. Such fee will be paid with non-trust account funds.

ARYA will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. ARYA will reimburse them for their reasonable expenses.

ARYA Initial Shareholders’ Agreements

As of the date of this proxy statement/prospectus, there are 19,186,500 ordinary shares issued and outstanding, which includes an aggregate of 3,737,500 Class B ordinary shares held by the initial shareholders, including Sponsor. In addition, as of the date of this proxy statement/prospectus, there is outstanding an aggregate of 5,149,666 warrants, comprised of 166,333 private placement warrants held by Sponsor and the 4,983,333 public warrants.

 

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At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, our initial shareholders, Cerevel and/or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our initial shareholders, Cerevel and/or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposal A, the Nasdaq Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter (ii) the Domestication Proposal, the Governing Documents Proposal B, the Governing Documents Proposal C, the Governing Documents Proposal D and the Governing Documents Proposal E are approved by the affirmative vote of at least a two-thirds (2/3) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (iii) otherwise limit the number of public shares electing to redeem and (iv) New Cerevels net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement and the PIPE Financing.

Entering into any such arrangements may have a depressive effect on the ordinary shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he or she owns, either at or prior to the Business Combination.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

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BUSINESS COMBINATION PROPOSAL

Overview

We are asking our shareholders to adopt and approve the Business Combination Agreement, certain related agreements and the transactions contemplated thereby (including the Business Combination). ARYA shareholders should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Business Combination Agreement, which is attached as Annexes A-1 and A-2 to this proxy statement/prospectus, and the transactions contemplated thereby. Please see “—The Business Combination Agreement